Massachusetts Homestead Now Available for Primary Residence Owned in Trust
During December of 2010, the Massachusetts legislature passed a major revision to the Massachusetts Homestead law. Although a prior bankruptcy case gave some authority for filing a homestead on trust owned property, effective mid-March of 2011 the new Homestead law explicitly authorizes the beneficiaries of a trust that owns real estate to declare a homestead. Additionally, the new law grants an automatic $125,000 homestead. No action is required to take advantage of the automatic homestead. But the new law allows an additional exemption of up to $500,000. To take advantage of the higher exemption a special Homestead Declaration must be filed at the Registry of Deeds. The Homestead is available only on one’s primary residence. Those who have declared a homestead in another state should seek advice before placing a homestead on their Massachusetts real estate (and often should not do so, because it could result in the loss of more favorable treatment from the other state).
If a Homestead Declaration is appropriate for you, there are several steps which should be accomplished. First, your revocable trust will need to be amended to allow the trustee to declare a homestead under the new law. Additionally, if your home is in a nominee trust (also known as a real estate trust) you will need to deed the property over to your revocable trust. Finally, you will need to execute a Homestead Declaration for the trust owned real estate. Legal advice is recommended before acting hastily.
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