By filing a Declaration of Homestead at the Registry of Deeds, a Massachusetts homeowner is able to protect the equity in his home from the laws of debt collection. The Homestead has been available for more than a century and there’s really no downside – it’s purpose is to prevent a family from being thrown out of its home for the payment of a debt. But a number of ambiguities have engulfed traditional homestead law, the most notable being whether you must file a new homestead after refinancing.
The Massachusetts state legislature recently completed work on a bill that would completely revise existing homestead law in a very positive way. The bill is on its way to the governor’s office where it will hopefully be signed. We’ll keep you posted on its progress.
This new law would grant all homeowners an automatic homestead exemption of $150,000. Any homeowner desiring more protection (and all existing homesteads are grandfathered in here) could file a written homestead declaration at the registry of deeds. This would provide $500,000 in protection.
While the law is quite comprehensive and will take some time to fully digest, it does clarify many previously ambiguous items. For example, the new law specifically states that a new mortgage (which is what you get when you refinance) does not void an existing homestead so there would be no need to record a new declaration. The law also makes clear that property held in trust may be the subject of a homestead.
This is just a sampling of the provisions of the new homestead law, the full text of which is available here. As soon as it is signed by the governor, we’ll let you know.










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