New Homestead Law: $500,000 In Asset Protection

Buying a Lexington, MA home, for most, is the single biggest investment homeowners will make in their lifetime. But what happens if you are involved in a car accident or run into serious financial trouble, and creditors are knocking on your door, threatening to place a lien on your Lexington home?

Massachusetts Homestead Act declaration can protect your single biggest assest in these situations. A Massachusetts Homestead Declaration enables all Massachusetts homeowners to protect up to $500,000 in equity from certain claims of creditors. It is one of the most overloked and cost-effective asset protection devices in Masachusetts.

As of March 16, 2011 the new Homestead Law will take effect. It provides:

• All MA homeowners will receive an automatic homestead exemption of $125,000 for protection against certain creditor claims on their principal residence without having to do anything.
• All MA residents are eligible for a $500,000 declared homestead exemption by filing a declaration of homestead at the Registry of Deeds. Both spouces will now have to sign the form, which is a change from prior practice.
• The existing Elderly and Disabled Homestead will remain available at $500,000
• If you have a have a homestead as a single person, and get married, the homestead automatically protects your new spouse. Homesteads now pass on to the surviving spouse and children who live in the home.
• You do not have to re-file a homestead after a refinance. Under the new law, homesteads are automatically subordinate to mortgages, and lenders are specifically prohibited from having borrowers waive or release a homestead.
• Closing attorneys in mortgage transactions must now provide borrowers with a notice of availability of a homestead.

Thank you to Richard Vetstein, Esq. and Marc Canner, Esq. of TitleHub.com for the providing the above information. If you need legal assistance, please contact Richard or Marc for more information. They can also be reached through their Real Estate Law Blog.

Theresa D'Antuono
Lexington MA Real Estate Agent
Search All Lexington Area Homes For Sale
Visit Our Lexington MA Resources Facebook Page for Events and Updates