In Massachusetts, the Homestead Protection Act provides homeowners with a safeguard against unsecured creditors by protecting a portion of their home’s equity. Recent legislative updates have enhanced these protections, particularly for homeowners aged 62 and older.
The homestead exemption shields homeowners’ equity—up to the designated limits—from unsecured debts like credit card balances, medical bills, and personal loans. However, it does not apply to secured debts such as mortgages, child support, tax liens, or construction liens, meaning unpaid mortgage payments or overdue taxes can still result in the forced sale of the home.
Key Updates to Massachusetts Homestead Protection:
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It’s simple to file! Just fill out this form and file with your local registry. It’s a $35 fee. Make sure to have it notarized.
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Increased Declared Exemption: Homeowners who file a homestead declaration can now protect up to $1,000,000 of their home’s equity.
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Automatic Protection: Even without filing, homeowners automatically receive protection for up to $125,000 of their home’s equity.
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If you already have a homestead filed at the previous $500,000 limits, you do not need to refile. You will automatically receive the stepped up exemptions.
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Joint Filing for Spouses: Those filing as joint tenancy or tenancy by the entirety share in the undivided protection of the $1,000,000.
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Other Multi-Owners Circumstances: If owned as tenants in common or as trust beneficiaries, The $1,000,000 is divided between owners proportionately. And if there are more than two owners, there may be an option to add $250,000 of further protection.
- New marriages or Divorce: There are new protections to extend filed homesteads to newly wed spouses or primary resident in a divorce. This helps avoid unintended protection gaps.
Read more about MA Homestead Protections on their FAQ page.
Implications for Homeowners Aged 62 and Older:
Espoused homeowners aged 62 or older can stack homestead declarations. Given the increased exemption, it’s effectively allowing a married couple to protect up to $2,000,000. It’s important to note you must refile your homestead to notate your age.
How Homestead Protection Works in New Hampshire
New Hampshire has a similar but less generous homestead exemption law:
- The default homestead exemption in New Hampshire is $120,000 per owner. This means $240,000 for a married couple.
- Unlike Massachusetts, New Hampshire does not require homeowners to file paperwork to claim this protection—it is automatic.
- Homeowners 62 or older or disabled may qualify for a higher exemption, but the state does not offer the same stacking benefits for married couples as that’s already available for those under age 62.
New Hampshire’s homestead laws offer less financial protection than Massachusetts but provide automatic coverage without requiring homeowners to file documents.
Homestead Protections in Other States
Homestead protections vary widely across the U.S. Some key examples include:
- Florida: Offers unlimited homestead protection, but the property must be 2 acres or smaller in a municipality (or up to 160 acres in a rural area).
- Texas: Provides unlimited homestead protection but has limits on property size (10 acres in urban areas, 100 acres for individuals in rural areas, 200 acres for families).
- California: Offers an automatic homestead exemption ranging from $300,000 to $600,000, depending on the county’s median home price.
- New York: Provides homestead protection between $89,975 and $179,950, depending on the county.
- Rhode Island: Has a $500,000 homestead exemption, but unlike Massachusetts, does not allow stacking for couples over 62.
Key Takeaways
In Massachusetts, filing a Homestead Declaration can protect your home from unsecured creditors up to $1,000,000. Refiling your homestead at age 62+ allows couples to double their protection to $2,000,000. The process is simple: complete a form, notarize it, and file it with the Registry of Deeds. New Hampshire provides automatic protection of $120,000 per person, with a slightly higher exemption for seniors but no stacking. Homestead protections vary by state, with some offering automatic protections (like NH) and others requiring declarations (like MA). And now that you’re well versed in protecting your home from creditors, take a read on how to evaluate homeowner’s insurance so it’s protected from most anything else!
