What is a Homestead Declaration and Can it Protect my Family?

Whether it is a house, a condo, or a townhouse, our homes are more than just where we live - they are often our largest single asset and our most significant investment. For that reason, it's important that homeowners take advantage of the Massachusetts Homestead Act, which offers homeowners and their families significant protection from creditors.

How it Works. A homeowner who files and records a Declaration of Homestead with the appropriate Registry of Deeds acquires an Estate of Homestead, which the equity value of your primary residence, up to $500,000 above any mortgage on the property, from the reach of creditors. Only homeowners who record a Declaration of Homestead for their residence are eligible for these protections. And time is of the essence, as the protections afforded by the Declaration of Homestead will apply only to debts or claims that arise after the Declaration is recorded.

What it Does (and Doesn't) Protect Against. A Declaration of Homestead might come into play in the following scenarios: (i) where a homeowner gets into a car accident and the injured party seeks an attachment against the home; (ii) where an unsecured creditor seeks to obtain an attachment or pre-judgment lien against the home; or (iii) where the homeowner is a business owner, lawyer, or medical professional who is subject to professional liability or other law suits.

A Declaration of Homestead will not protect against all debts or claims, however, and the most significant exclusions include: (i) debts or claims acquired by the homeowner prior to the recording of the Declaration; (ii) for debts arising out of the Homestead (like mortgages); (iii) a judgment execution issued by a probate court to enforce the payment of support to a minor child or spouse; and (iv) it will not prevent the recording of a tax lien or the sale of the homestead for debts in the nature of local, state, or federal taxes.

Will it Protect Same-Sex Couples and their Families? The Homestead act protects the owner of real property (whether a sole owner, joint tenant, tenant-by-the-entirety, or tenant-in-common) and his or her family. Under the Act, a "family" may consist of (i) a sole owner, (ii) spouses, (iii) a parent and his or her children, and (iv) spouses and their child or children. Because the Act is a creation of Massachusetts law, and federal tax and marriage laws to not apply, the protections afforded by the Declaration of Homestead apply equally to same-sex couples and their children as to opposite-sex couples.

When an individual who has recorded a Declaration of Homestead passes away, the law continues to protect the primary residence until the youngest child, if any, turns 18 or becomes married and until the surviving spouse, if any, dies or remarries. Even though the same-sex spouse of an owner is protected by the Homestead Act, any biological children of the non-owner spouse should be properly adopted by the owner spouse to ensure the full protection of the residence for their benefit.

Legislation has been filed which would make the Homestead protection available automatically to the owners of real estate. If and until such legislation passes, owners must prepare and record a Declaration of Homestead in order to protect their property. Usually, an attorney can prepare this relatively simple form for a small flat fee (in addition to the court filing fee of $35.00) and record it in the appropriate registry.