Homestead protection is available to MA property owners and shelters their equity from unsecured creditors. This is a vital law for any homeowner. The MA homestead protection act details below covers the most important aspects of this law.
What Is Protected
Property owners gain equity in a property over time. The amount may not be much in the first few years of ownership, but can increase to a substantial value over the years. There may be cases where creditors or other parties will target that dollar value to cover a financial responsibility of a homeowner. Shielding it may be critical.
If you are in an accident and the other party wins a lawsuit against you, and the award they are granted is beyond the dollar value of your insurance. Your assets, such as real estate, may be used to cover your financial obligation. This is just one example of many possible scenarios where homestead protection could prevent you from losing equity.
MA Homestead Protection Act Details
Massachusetts homeowners get an automatic protection of one-hundred and twenty-five thousand dollars (125,000) without needing to file any forms. A Declaration of Homestead can be filed at the local registry of deeds in your county of primary residence to increase the coverage up to five hundred thousand dollars (500,000). The filing involves a specific form and payment of a filing fee, which differs from county to county but is usually less than one-hundred (100) dollars. If you are purchasing a new property, information will be given to you by the closing attorney.
Homestead protection will apply strictly to one home, and it will be the real estate that you maintain as a primary residence. There are specific provisions for persons over the age of sixty-two (62) and disabled individuals. The Homestead Law will not cover all creditors or scenarios. Exceptions include federal and local tax assessments, mortgages on the property, and probate court judgements, just to list a few. For complete details on this law, visit the Secretary of State website. The details in this article are offered as an introduction based on the resources available at the time it was published. It is subject to change without notice (as alterations may occur to the Homestead law). Always consult with the website link above for up to date facts.