In 2024 the Massachusetts Legislature passed, and the Governor signed, Chapter 150, of Massachusetts General Laws, to replace the prior Homestead Law. This was a comprehensive law to address the issue of affordable housing in Massachusetts. Here we merely outline some questions regarding the Homestead portion of the new law.
What is a Homestead?
A Declaration of Homestead is a document you file at the appropriate Registry of Deeds, for $35 fee to them, which provides your principal residence with protection from creditors, called and Estate of Homestead. Under the 2024 law, you are provided with $1,000,000.00 of protection upon filing. Note, this must be where you live, or where you intend to live, and not your summer home or rental property.
Note that prior to the new law, the protection was $500,000 – for a properly filed Homestead.
What Protection Do We Have if We Fail To File?
Even if you fail to file, the law provides you with $125,000 in automatic protection. But you can file at any time and often even a seemingly untimely filing offers full protection. This number has not changed with the new law.
Our Home is Held in a Trust – Can We Be Protected Too?
Yes. So long as you are the beneficiary of the trust. Note that the Trustee must sign and file the Homestead, and they must do so properly identifying the proper persons (the Trust beneficiaries) to be protected.
If the home is owned by a joint tenancy (whomever survives owns solely) or tenancy by the entirety (marriage) the homestead applies allocated among all owners.
We Filed A Homestead When We Bought/Refinanced Our Home – Do We Need to Refile?
No. Not generally but ask your lawyer especially if there are refinances or folks coming off or onto the deed.
Are There Extra Protections For Folks Over 62?
Yes! Each homeowner who files is entitled to the $1,000,000.00 exemption. So married seniors get $2,000,000 in Homestead coverage. Note that the Homestead protection terminates upon death.
Are There Extra Protections For the Disabled?
Yes. You should consult with your attorney for how to properly protect your home for the disabled.
Do We Still Need Homeowners Insurance?
Yes, absolutely. If someone is injured on your property, you need professional insurance adjusters and attorneys to represent you. The insurance company will generally resolve the claim or pay any judgment, keeping your home safely away from the injured party. Note, however, if there is a judgment beyond (more than) the amount of your insurance coverage, that could result in a lien against your home, so a Homestead would provide some protection.
Furthermore, you can often bundle homeowners’ insurance with motor vehicle insurance for Umbrella Insurance, which offers even more protection.
Finally, even if you rent, you should secure renters’ insurance and an Umbrella policy.
How Does a Homestead Work In Bankruptcy Cases?
If you file for a personal Chapter 7 Bankruptcy in Massachusetts AND you have a Homestead, your home is protected up to $1,000,000 from creditors. Note, however, this does not include the mortgage company, taxing authorities, any Probate Court judgments for divorce and child support and other exemptions. Generally, the Homestead is for protection from consumer creditors, lawsuits from creditors, medical bills, etc.
Can Burns & Jain Help with a Bankruptcy Question?
Of course! If you believe you may need a “fresh start” with personal bankruptcy, getting your consumer debts discharged, call Attorney Neil Burns and Attorney Roshan Jain for a free consultation: 617-227-7423.