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Passage of Homestead Reform Legislation Expands Protection

Earlier this year, Governor Patrick signed into law a comprehensive revision of the Massachusetts homestead protection law.

The previous law, M.G.L. c. 188, protected up to $500,000 of equity in a primary residence from creditors upon recording a declaration of homestead, but contained several confusing provisions that sometimes disadvantaged homeowners.

Under the new law, every Massachusetts homeowner will automatically receive $125,000 of creditor protection, regardless of whether they file homestead declaration. Homeowners who file a declaration of homestead will continue to receive $500,000 of creditor protection. Moreover, the rules for filing a homestead declaration clarify the following:

  • Trust beneficiaries are able to secure homestead protection.
  • Refinancing will not terminate previously filed homesteads.
  • Proceeds from the sale of a home or insurance are protected
  • Spouses and co-owners who transfer property between and among themselves are protected.
  • Homestead protection is extended to manufactured homes.

The new Homestead Legislation went  into effect on March 16, 2011.