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The Bank of America Building 23 Main Street, Andover, Massachusetts 01810 Telephone: 978.475.0080 Michael B. Feinman* Stephen P. Shannon* Tali A. Tomsic Email: email@example.com Email: firstname.lastname@example.org Email: email@example.com
Business & Trial Lawyers
Fax: 978.475.0852 URL: http://www.feinmanlaw.com
*Admitted in Massachusetts and New Hampshire
MASSACHUSETTS HOMESTEADS (New Changes Effective March 16, 2011) Homestead Highlights • Automatic $125,000 exemption without filing • $500,000 exemption with filed declaration of homestead • Trust property can be homesteaded • Explicit rules re stacking and multiple owners • Only recorded liens have state-law priority • Protects owners and the use and occupancy of the property by “family members”. • Old traps for the unwary gone, new ones in place New Filing Requirements • All owners who desire homestead protection must sign, per §3(a). – Major departure from prior law, under which only one could sign. See Dwyer v. Cempellin, 424 Mass. 26 (1996). – Such owners must occupy or intend to occupy the home as a principal residence, per §3(a). • Reservation of homestead in a deed is no longer permitted, per §5(c). Issues: In the case of multiple owners: Not all owners sign, or refuse to sign Signature of wrong person Other signature problems Is the homestead valid? Is the homestead valid only for those that sign?
Inc. 2009) (mortgage should not have been accepted for recording because of defective acknowledgement). LEXIS 3429 (Bankr. Issues: How are owners identified? What is sufficient identification? What about non-minor children? Perjury acknowledgment is new. Agin v. 2009 Bankr. • “Signed and acknowledged under penalty of perjury” by each owner or by the trustee. What about an improper or inadequate signature or acknowledgment? The bankruptcy court will not necessarily treat forms promulgated by Registrars of Deeds as fulfilling this requirement. Cf.. No. May 21. 2|Page . per §5(a). per §1 ¶4. D.Contents of Declaration • Each owner to be benefited and the owner’s non-titled spouse must be identified per §5(a)(1). Adv. (In re Giroux). 08-1261. Registration Sys. • Declaration must state that “each person named therein” occupies or intends to occupy the home as their principal residence. Minor children are covered. Mortg. Mass. Elec.
• These requirements are the same as under prior law. • Stacking of exemptions is permitted with multiple owners per §1. personally appeared _______________________. proved to me through satisfactory evidence of identification. or (2) Doctor’s letter certifying that the declarant meets the SSA disability requirements. • For a disabled person.Additional Elderly/Disabled Homestead Requirements Issues: • Declaration under §2 must state that owners to be benefited are No new requirements from prior elderly or disabled. before me. must also record one of (1) Original or certified copy of SSA disability award letter. 20____. 3|Page . the undersigned notary public. intend to occupy the premises. and occupy or version of statute. which were _________________________. and both acknowledged to me that (he) (she) signed it voluntarily for its stated purpose and swore or affirmed to me under penalty of perjury that the contents of the document are truthful and accurate to the best of (his) (her) knowledge and belief. to be the person who signed on the preceding or attached document. ¶2 Suggested form for Acknowledgment On this ______ day of _________.
Mass. any prior homestead exemption is restored. per §9 ¶2. 2004). per §9 ¶2. Mortgages Issues: Does §4 provide for an “automatic” exemption of the homestead if a prior homestead is invalid? Does the automatic homestead still apply under §10(c)? Issues: • Homesteads are automatically subordinate to mortgages. 82 (Bankr.D. 293 B. D. • Confirms cases like In re Heretakis. 324 (Bankr. per §9 ¶1.Effect of Subsequent Homestead • Executing a new homestead does not terminate any pre-existing protection. 2003) What if the mortgage is signed by fewer than all of the owners or record. Mass. per §10. – This rule does not resurrect a homestead that was terminated under §10(a)(5) because the owner homesteaded other property. 307 B.R. – Overrules cases like In re Leigh. per §9 ¶1? 4|Page . • Mortgagees may not require releases of homestead. • If a homestead declaration is found to be invalid. per §4 ¶2. • Homestead-waiver clauses ineffective except as a statement of subordination.R.
claims and liens – Liens recorded prior to “creation of the estate of homestead” – Court-ordered support payments – Attachment. state and local taxes. per §4 ¶3. • Patriot Portfolio. assessments.000.3d 677 (1st Cir.Priority • In addition to mortgages. 164 F. duress. What type of fraud? Are disclaimers required? 5|Page . LLC v. or lack of capacity • Automatic priority over the homestead exists for certain unsecured credit transactions under $20. undue influence. 1999) is still good law when applying the law in a bankruptcy. or sale for ground rent – Execution on judgment for fraud. levy. Issues: Previous exception for “debt contracted prior to the acquisition of said estate of homestead” is omitted. per §9. Weinstein (In re Weinstein). mistake. the following have priority over a recorded homestead per §3(b): – Sale for federal.
2003). per §1 ¶2(1) – Common owners and cobeneficiaries are protected in proportion to their fractional interests. (4). while other homesteads can’t. Issues: Are life estates covered? What about remainder interests? What happens when some owners sign a declaration and others do not? What about combinations of elderly and non-elderly owners? 6|Page .3d 1 (1st Cir. SMS Financial V. per §1 ¶2(2) • Elderly/disabled homesteads can be stacked per §1 ¶¶(3). – Answers question left open by Garran v.Multiple Owners • General Rules: – Joint and entireties owners share a “whole and unallocated” exemption. LLC. 338 F.
Aldrich v.Mass. 293 B. 64 Mass.What is a “Home”? • Single or 2 to 4 family dwelling. 2010). – Declaration recorded in registry.R. 334 (Bankr. Issues: What about residences containing more than 4 families? More than 4 units? More than 4 families? What about “land” consisting of separately deeded adjacent parcels? Be sure to describe all parcels by metes and bounds just in case they’re included after all. rev'd In re Fiffy.Mass. 550 (1st Cir. Gaskill.D. per §1 ¶6 – Probably excludes noncontinguous land. plus “accessory structures appurtenant thereto and the land on which it is located”. while remainder interests may not be covered. see In re Fiffy.) 155 (1852) is probably overruled.R. See In re McComber. 281 B..R. (10 Cush. 422 B. BAP 2003) 7|Page .e. • Manufactured home (i. not town clerk’s office • Residential condominium or cooperative unit is covered • Life estates are probably covered. 451 (Bankr. 2002).D. a trailer) – Declarant no longer needs to be elderly or disabled.
Cunningham (In re Cunningham). §1 ¶5. No. • Benefits of homestead extend to non-titled family members per §5(a). LEXIS 2207. Issues: Issues: Should a conveyance require non-titled spouses to sign a deed to get good.Proceeds • Proceeds of sale exempt for one year or until acquisition of new principal residence. 2007 Bankr. 9911836 (Bankr. June 27. clear title? 8|Page . Mass. per §11 • Proceeds received “on account of” fire or other casualty exempt for two years or until reconstruction/repair or acquisition of new principal residence. 2007) (proceeds of civil action for flood damage not exempt) • Pasquina v. 513 F.3d 318 (1st Cir. D. 2008) and §522(c) maintain exemption during case and after discharge Termination Termination must take place as set forth in §10 or §2(b). per §11 • Probably overrules In re Thurston.
per §4 ¶2 • Minor children are covered. Death. Mass. Issues: Can a separated spouse claim an exemption in the martial residence? Can a separated spouse claim an exemption in a separate residence? Does this protection extend to curtail actions of creditors? 9|Page . but not those over 18. per §7 • Separated spouses’ declared exemptions on separate properties cannot total more than one exemption.R.Marriage. 315 B. and Divorce • New spouse automatically gains the benefit of a §3 homestead. • With a divorce complaint pending. 2004). spouse and minor children may enjoy use and occupancy until order of the Probate Court. 181 (Bankr.D. – But not a §2 homestead • Declared (but not automatic) homestead survives death or divorce for the benefit of spouse and minor children. per §7 – Confirms theory of In re Melber. per §6.
496 F. D. 655 (1995) (can’t homestead trust property) – Per §5(a)(4) the trustee can record a declaration of homestead. 334 B. 397 B. . 772 (Bankr. 1st Cir. 320 B. anyone can homestead a trailer • Hildebrandt v. per §5(d).R. this deed “between . “both estates of homestead together shall not exceed the declared homestead exemption” • In re Kelly. D. .3d 11 (1st Cir. which benefits the trust beneficiaries • In re Chew. 38 Mass. 2008) (H’s homestead trumped separated W’s prior homestead on her new home) – But. of Bristol County v.P. individually hold an estate of homestead” does not terminate the preexisting homestead • Asst. Spinelli.R. Mass. Mass. 40 (B. 2007) (Creditor barred from objecting to homestead based upon claim preclusion) – This case is probably good law based upon the automatic homestead now in place.R. Recorder of the North Registry Dist. 2005) (55-year-old couldn’t homestead a trailer) – Per §1. 186 (Bankr. Issues: 10 | P a g e . . Collins (In re Hildebrandt).Old Traps Gone – New Issues • In re Gunnison. Ct. App.A. . co-owners who . 2005) (debtor lost homestead by deed from he and ex-girlfriend to himself) – Per §10(b).
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