The American Heritage Dictionary, 5th Edition, defines a “homestead” as “property qualifying as a person’s home under certain laws, such as laws providing tax abatements and exemptions, survivorship rights for spouse and children, and immunity from claims of creditors.” It defines a “homestead exemption,” as “partial or complete exemption of homesteads from certain laws, such as those governing bankruptcy and taxation.”
The above definition is obviously a general description and a good starting point – but is not meant to fully address the nuances of the Massachusetts Homestead Law (which does not provide protection from taxation) and provides for three very specific types of homestead exemptions:
(1) “automatic homestead exemption” of $125,000, which does not require a written, recorded declaration
(2) a “declared homestead exemption” – “an exemption in the amount of $500,000” – which requires a written declaration recorded at the registry of deeds
(3) an “elderly or disabled person’s declaration of homestead protection” of 500,000 (also requires a written, recorded declaration)
It is important to identify which type of homestead exemption would be most beneficial given a client’s particular situation.