Effective March 16, 2011 a new law, MGL Chapter 395, will provide changes to the current homestead law, some of the changes include:
· Automatically protects up to $125,000 in home equity without filing
· Protects up to $500,000 for those who file for homestead protection
· Allows spouses to both file - currently only one may file
· Clarifies that there is no need to re-file after refinancing
· Provides coverage for homes kept in trusts.
According to the new law, all currently existing homesteads shall continue in full force and effect. Updated Homestead Forms will be available shortly.
What this Means: The Homestead act protects equity in your home from attachment from creditors who have an interest that is acquired after the homestead is filed, not those who already have an interest before the homestead is filed. Mortgages (first and second) are exempt from the homestead exemption, MassHealth is also exempt. You would generally be protected from other creditors, credit card debt, lawsuits, auto loans, and any other creditors not already exempt as named above. The filing fee for a Homestead Declaration is $35, so the benefits far outweigh the cost.
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