For most families, a home is more than a place to live; it’s their most valuable asset. In Massachusetts, where real estate values continue to rise, protecting that asset is both a personal and legal priority. That’s where the Massachusetts Homestead Protection Act comes in; it is a longstanding law designed to protect individuals’ primary residences from unsecured creditors.
In August 2024, Massachusetts passed one of the most impactful revisions for homeownership protection, making the act stronger and more flexible than ever. With these new updates now in effect, we strongly encourage homeowners to take a closer look at how the Homestead Act’s increased protection can fit into their long-term legacy strategy.
Let’s take a closer look at the key updates to the Homestead Act of 2024 and how these changes can impact both homeowners and their estate planning strategies.
Increased Protection
The most critical change to the Homestead Act is the increase in the protection limit. Prior to August 2024, homeowners could declare up to $500,000 in equity from unsecured creditors; that cap has now doubled to $1,000,000 per residence, per family. This increased protection was designed to prevent the forced sale of a homeowner’s primary residence in order to pay off any unsecured debt, often in the form of credit card balances, personal loans, or lawsuits.
Moving forward, if a homeowner wants to gain this level of protection and coverage, they must file a Declaration of Homestead with the Registry of Deeds. For homeowners that have yet to file that declaration, the automatic homestead protection of $125,000 still exists for their primary residence. However, if a homeowner has already filed a homestead declaration, they will not need to re-file and will automatically benefit from the increased protection.
Expanded Eligibility for Spouses and Family Members
One of the more notable and family-friendly features of the updated law is the increased protection for spouses and family members that are either currently occupying or planning on occupying the home as their main residence.
The law now clarifies that homestead protection extends not only to the homeowner but also to their non-owner spouse and minor children, so long as they reside (or plan to reside) in the home. This is especially important in households where one spouse holds legal title to the home while the other does not, such as in single-name ownership situations or where the home is held in a trust. In these cases, even a non-owner spouse can still benefit from homestead protection if they live in or intend to live in the residence as their primary dwelling. Similarly, minor children under the age of 21 are automatically covered by the homestead protection.
For homes owned in trust, the law requires the trustee to file the homestead declaration on behalf of the beneficiaries, and each beneficiary who lives in or intends to live in the home must be identified in the filing. This includes the spouse of any resident beneficiary, whose name must also be included in the declaration along with a statement confirming their occupancy or intent to occupy the property.
Enhanced Protection for Elderly and Disabled Homeowners
The updated Massachusetts law also provides additional homestead protections for individuals that are 62 years of age or older or disabled, regardless of their age. These additional protections recognize the unique financial vulnerabilities these individuals face, particularly when it comes to preserving housing security.
Under the updated act, each qualifying homeowner is entitled up to that $1,000,000 in protection for their primary residence. This means that if there are two co-owners (whether as spouses, relatives, or unrelated), their protection can be combined for up to a total of $2,000,000.
Conclusion
While it is important to note that homestead protections do not replace insurance coverage, they do act as an additional layer of protection against unsecured creditors and help ensure your loved ones have a home should something happen to you. With these changes now in effect, incorporating these protections into an estate plan isn’t just a smart move — it’s essential. For many individuals, the home is one of the largest assets in their estate. Moreover, because the law is retroactive and applies to earlier filings, many homeowners may already be entitled to the enhanced protection without even realizing it.
Since homestead laws are nuanced, it is critical to discuss your unique situation with a qualified attorney. If you are in the process of updating your estate plan and would like more information on how the Homestead Act of 2024 will affect your planning strategy, request a consultation with our team today.