Don't Lose Your Home To A Lawsuit

Did you know that in Massachusetts you can protect the equity in your primary home from some unsecured creditors for $35?  The process is simple.  A form called a Declaration of Homestead is filed in the Registry of Deeds in the county where the property is located.  The Registry charges only $35 to record this document.  In return for your $35 investment, up to $500,000 of equity in your primary residence is protected from certain unsecured creditors.

For persons under the age of 62, only one spouse or one owner of a particular piece of property can declare a homestead.  For disabled persons and persons over the age of 62, more than one spouse or owner can declare a homestead.

Here’s one example of how the Declaration of Homestead protects you:  Let's say that a lawsuit is waged against you because you were involved in a motor vehicle accident.  The Homestead prevents an attachment and possible forced sale of your home by the plaintiff.  In the event that you do not file the necessary paperwork with the Registry of Deeds, your house may be stripped from you and sold to satisfy the lawsuit.

Although filing a Declaration of Homestead does provide a certain level of security for a homeowner, there are some creditors that the Declaration of Homestead will NEVER protect you from:

For example:

• federal, state and local taxes
• mortgages used to purchase the residence
• an execution from the Probate Court for unpaid child support
• debts contracted prior to the acquisition of the homestead.

Filing a Declaration of Homestead is a simple, inexpensive way to protect your home.  This is a great first step towards asset protection and creating a comprehensive estate plan.