Homestead protection is available to MA property owners and shelters them from unsecured creditors. This is a vital consideration for any homeowner. The MA homestead protection act details below covers the most important components of this law.
Why Homeowners Need This Protection
Homeowners gain equity in a piece of real estate gradually. This equity may not be much in the short term, but will grow to a substantial amount over the years. There are scenarios where creditors or other parties may target that equity to fulfill a financial debt of a homeowner. Protecting it can be critical.
If you are in a car accident and the other party wins a lawsuit against you, and the damages are more than your insurance coverage. Your assets, such as real estate, may be used to cover your financial obligation. This is just one of many possible scenarios where homestead protection could save you from losing equity.
MA Homestead Protection Act Details
Massachusetts homeowners receive protection of one-hundred and twenty-five thousand dollars (125,000) without filing any forms. A Declaration of Homestead can be filed at the local registry of deeds in your county of primary residence to extend the protection up to five hundred thousand dollars (500,000). The filing involves a specific form and payment of a fee, which differs for each county but is normally under one-hundred (100) dollars. If you are purchasing a new home, details will be provided to you by the closing attorney.
Homestead protection strictly applies to a primary residence. There are specific provisions for individuals over the age of sixty-two (62) and disabled individuals. The Homestead Law will not apply to all creditors or lawsuits. Certain exceptions apply, such as municipal tax assessments, home mortgages, and probate court judgements, just to mention a few. For complete information on this law, visit the website for the Secretary of State. The information in this article are offered as an overview using facts available at the time it was published. It is subject to change without notice (as changes may take place to the Homestead law over time). Please always check with the website link included above for up to date facts.