The Massachusetts Homestead Act (Massachusetts General Laws, Chapter 188) is an important law designed to protect the use and possession of a family's home against creditors' claims. If a homeowner is sued, and the suit is decided against the homeowner, the creditor may be able to force sale of the property to pay the judgement. If a Homestead had been declared by the homeowner, then the home is safeguarded against such forced sale.

In other words, a Homestead (or "Estate in Homestead") is an interest in real estate which insures that for so long as the property to which it attaches is the principal residence of the declarant, creditors cannot force a sale of the property to satisfy their claims or judgments.

There are two types of Homestead; the "regular" Homestead and the "elderly or disabled" Homestead. Each carries with it some exceptions to the protection against claims.

The Regular Homestead

Anyone who owns (either as sole owner or as joint owner) his or her principal residence can declare a Homestead. The Homestead protects the declarant and his or her spouse and minor children, so only one homestead is appropriate per family. The Homestead protection is $300,000 of equity in the home, which means that if the equity in the home exceeds $300,000, a creditor may be able to force a sale, but the first $300,000 (after paying off any mortgages) would be paid to the homeowner. The creditor would get the balance. If the equity in the home is less than $300,000, it is fully protected.

The Homestead exemption of $300,000 is safe from attachment or sale for payments of debts, except:
taxes;
debts contracted before the Homestead is declared;
debts contracted to purchase the home;
court ordered alimony or child support payments;
where buildings on land not used by the household are levied upon or sold for the ground
rent (rarely applicable); or
court judgements based on fraud, duress, mistake, undue influence, lack of capacity.

Elderly or Disabled Homestead

Slightly different protection is available to those:
(a) over the age of 62; or,
(b) disabled, (which carries the same definition as "disabled" for purposes of Supplemental Security Income). For the "elderly" or disabled, $300,000 of Homestead protection is available for each owner who is over 62 or disabled, (unlike the "regular" Homestead, where only one person can declare the Homestead for the family). An elderly or disabled Homestead may also be declared as to a mobile home.

The exceptions to the elderly and disabled Homestead protection are:

taxes and liens (federal, state and local);
first and second mortgages;
debts or encumbrances existing before the homestead is declared;
court ordered alimony or child support payments;
where buildings on land not used by the household are levied upon or sold for the ground rent (again, rarely applicable).

How to Obtain Homestead Protection

Homestead protection is not automatic. You must file a Homestead Declaration in order to gain the benefits of the Homestead Law

A Homestead can be declared either in the deed by which property is acquired or by the later execution of a Declaration of Homestead which must then be recorded with the Registry of Deeds for the Town or City where the property is located. The forms need to be carefully completed, including precise book and page recording information from your deed and the form must be signed before a notary public. Notaries are available at most banks and municipal offices.

With respect to a mobile home, the Homestead Declaration must be filed with the City or Town Clerk for the municipality in which the home is located.

To file for disabled homestead protection, the declarant must attach a copy of the award letter from the Social Security Administration (regarding SSI income) or a registered Massachusetts physician's letter that the disability requirements are met.

What does it cost?

The recording fee for a Homestead Declaration is $35.00 for common records land, and $35.00 if the property is registered with the Land Court. Your deed will indicate if you have Land Court property ("registered land"); most properties are recorded in the common records. Checks are payable to "Commonwealth of Massachusetts."

Does Homestead protection also provide Medicaid protection?

No. Liens imposed by the Massachusetts Department of Revenue for payment of medicaid benefits are exempt from the homestead protection.

Virginia Stanton Smith, Esq.
Grinnell, Dubendorf & Smith
Berkshire Common Suite 320
Pittsfield, Massachusetts 01201
Tel: (413) 458-9601
Fax: (413) 458-9435
E-Mail: vsmith@gdslaw.com

(Editor's Note: Virginia Stanton Smith chairs the REBA Practice Standards Committee and was elected to the position of Clerk in 2003.)