Massachusetts significantly strengthened protections for homeowners on August 6, 2024, when new legislation doubled the homestead exemption limit from $500,000 to $1,000,000 for primary residences. This increase applies automatically to all homeowners who previously filed homestead declarations, meaning you don’t need to re-file to benefit from the enhanced protection. Additionally, elderly and disabled homeowners now receive up to $1,000,000 in personal homestead protection, which can be combined with other exemptions to shield even more equity from creditors.
If you have questions about how these changes affect your estate plan or want to ensure your home receives maximum protection, contact an experienced Massachusetts estate planning attorney to review your options.
Understanding the Massachusetts Homestead Act
The Massachusetts Homestead Act protects a primary residence by creating a legal shield against certain creditor claims. When creditors seek to collect debts, homestead protection requires them to wait for payment until after taxes and mortgages are satisfied and after you receive the equity in your home up to the homestead exemption amount. This often results in junior creditors receiving reduced payments or no payment at all, preserving your home equity for you and your family.
Massachusetts provides an automatic homestead exemption of $125,000 to all homeowners without requiring any paperwork. However, this automatic protection may be insufficient if your home equity exceeds $125,000 after accounting for mortgages and tax obligations. Homeowners can obtain significantly greater protection by filing a Declaration of Homestead, a simple document recorded with the Registry of Deeds that shields equity up to the statutory limit.
The 2024 Changes: Doubled Protection Limits
Before August 2024, homeowners who filed a homestead declaration received protection up to $500,000. The new legislation doubled this amount to $1,000,000 for declared homesteads filed under Section 3 of the Massachusetts Homestead Act. This change took effect immediately and applies retroactively to all existing homestead declarations.
Importantly, homeowners who filed declarations before the law changed do not need to take any action to receive the increased protection. Your existing declaration automatically provides $1,000,000 in protection without re-filing or updating any documents. However, the automatic homestead exemption for those who have not filed any declaration remains at $125,000, unchanged by the new legislation.
The new law also doubled the elderly and disabled homestead protection from $500,000 per person to $1,000,000 per person. Individuals aged 62 or older, or those who are disabled, can file separate declarations under Section 2 of the Massachusetts Homestead Act to obtain this enhanced personal protection regardless of marital status.
How Homestead Protection Works for Multiple Owners
When multiple owners share a home, the standard $1,000,000 declared homestead exemption under Section 3 is divided among them. Two co-owners would each receive $500,000 in protection, three co-owners would each receive approximately $333,333, and so forth. All owners who live at the residence are eligible to file the Section 3 Declaration and share in the homestead protection up to the $1,000,000 limit.
If a home is owned in trust, only the trustee can sign the declaration on behalf of the beneficiaries. Once filed, a Section 3 Declaration continues to protect the declarant’s family members who reside in the home, even after the declarant dies, providing important probate protections for surviving spouses and children.
Enhanced Protection for Elderly Homeowners
The elderly homestead protection under Section 2 functions differently from the standard Section 3 declaration. While Section 3 protection is shared among all owners, Section 2 allows each person aged 62 or older to individually declare a $1,000,000 exemption in their primary residence. If a home is co-owned by two seniors, each can declare the full $1,000,000 exemption without sharing that amount, potentially protecting up to $2,000,000 in combined equity.
To obtain this enhanced protection, you must affirmatively execute and record a Section 2 Declaration. A prior Section 3 Declaration does not automatically convert to a Section 2 Declaration when you turn 62. You must file the new declaration to receive the elderly exemption. Filing a Section 2 Declaration does not invalidate previous declarations you filed; instead, the later declaration relates back to the first declaration for purposes of determining priority against creditor claims.
Estate Planning and Probate Considerations
The interaction between Section 2 and Section 3 declarations creates important estate planning and probate implications that Massachusetts probate lawyers frequently address when counseling clients.
An elderly homestead declaration under Section 2 can be terminated by the death of the declarant, potentially leaving heirs who live in the home without protection. However, if the deceased declarant’s spouse inherits the home and continues living there, the Section 2 Declaration automatically converts into a Section 3 Declaration for the surviving spouse’s benefit. The surviving spouse can then file their own Section 2 Declaration if they are 62 or older and want the enhanced individual protection.
For sole owners over 62, filing a Section 3 Declaration rather than a Section 2 Declaration may provide better continuity of protection for family members after death, even though both provide the same $1,000,000 protection level during the owner’s lifetime. An estate planning attorney can evaluate your specific family circumstances to determine which type of declaration best serves your goals.
What Homestead Exemptions Do Not Cover
Homestead declarations protect homeowners from certain creditor claims during bankruptcy and debt collection, but several types of claims remain unaffected by homestead protection:
- Sales for federal, state, and local taxes, assessments, claims, and liens
- Mortgages on the home
- Court orders enforcing spousal support, child support, or support for former spouses
- Judgments based on fraud, duress, undue influence, or lack of capacity
- Liens recorded on the home before the homestead was created
- Ground rent claims on buildings situated on land not owned by the homeowner
A knowledgeable estate planning attorney can further explain these exceptions and how they might apply to your situation. This helps homeowners to maintain realistic expectations about the limitations of homestead protection.
Protect Your Home with a Massachusetts Estate Planning Lawyer
The doubled homestead exemption limits are a major improvement in creditor protection for Massachusetts homeowners, but these benefits only apply to those who file the necessary declarations. Whether you need to file your first homestead declaration, want to add a Section 2 elderly exemption, or need to coordinate homestead protection with trusts and other estate planning tools, Roark Mansur Law provides experienced guidance on protecting your most valuable asset.
Contact our Massachusetts estate planning attorneys today to review your homestead protection options and ensure your home receives maximum legal protection under the new law.