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October 23, 2003 Saugus Advertiser
HOMESTEADS IN MASSACHUSETTS
A homestead is a legal document that is designed to protect the possession and enjoyment of your home against most creditors and lawsuits as long as you occupy or intend to occupy it as your principal place of residence. It’s like a free insurance policy in that other than the initial filing fee, there are never any more premiums. If you reside in a mobile home, you file the homestead at Town Hall, otherwise, they are filed at the registry of deeds in Salem. The current filing fee for a Homestead is $35.00.
There are two types of Homestead forms: the general Homestead form and the elderly or disabled Homestead form. Prior to November 2, 2000, the general Homestead provided for $100,000 of protection while the elderly or disabled Homestead provided $200,000 of protection. Since November 2, 2000 both of these amounts have increased to $300,000. Homesteads filed prior to November 2, 2000 are automatically eligible for the increased protection, nothing additional needs to be filed. The major difference between a general Homestead and the elderly or disabled Homestead is as follows:
? Only one owner may file under a general homestead for his or her “family”, this means that for those under age 62 there may only be one homestead and a maximum of $300,000 of protection.
? Under the elderly or disabled Homestead, each owner who is 62 years of age or older or disabled is entitled to file for homestead protection. If both owners are over 62 or disabled you would then have $600,000 of protection. With some houses in Saugus selling for over a million dollars, this is a good time to check to see that you have the maximum protection.
Now, suppose that you have a husband aged 65 and a wife aged 60 and a child aged 40 living at home. Who would be the proper person to take out the homestead? The child is not an owner and therefore ineligible to take out the homestead. The wife should take out a regular homestead giving her and the family $300,000 protection and the husband should also take out an elderly Homestead to give him an additional $300,000 of protection.
There are some things that the Homestead does not protect against. If you have a mortgage on your home at the time the Homestead is filed, the mortgage as well as any other pre-existing debt is not protected. It can protect you against some law suits but does nothing to protect your home against the possible impact of nursing home costs.
In some cases when you refinance your home a new Homestead will be required. This usually happens when the new mortgage company requires you to release your homestead before they give you any money. In this case you should file a new homestead as soon as the new mortgage has been recorded. Recently the trend has been to subordinate the Homestead to the mortgage. This means that you are releasing the Homestead to that specific transaction which means that you no longer need to file a new Homestead.
I generally recommend that everyone who owns a home file for the Homestead protection. It is simple and inexpensive. Forms are available at the Registry of Deeds or online at www.salemdeeds.com or can be prepared for you by most attorneys for a modest fee.