The Homestead Exemption or the "Declaration of Estate of Homestead" provides protection and security to homeowners, eliminating the threat that the equity in their principal residence could be exposed to satisfy common debts or obligations. This is a simple mechanism, yet most homeowners are not familiar with it, and it is an underutilized law that allows homeowners to protect certain equity in their principal residence from the majority of creditors.

Massachusetts General Laws Chapter 188, § 1-10 as originally written allowed an owner of real estate, for the benefit of themselves or their family, to exempt Five Hundred Thousand Dollars ($500,000.00) in home equity from attachment, levy on execution, or sale for payment. In other words, it eliminates the threat that the equity in your principal residence could be exposed to satisfy "common debts" or obligations.

As of March 16, 2011, the NEW Massachusetts Homestead Act completely rewrites Chapter 188, § 1-10 providing home owners more modern protection.

Here are some of the important changes to the new Homestead Declaration Law:

• Existing homesteads remain valid.
• There is an automatic $125,000 homestead; no recordation of a homestead declaration is needed for this protection.
• Homeowners receive a $500,000 homestead protection by recording a homestead declaration; all owners must sign to gain the protection. There is a one-time $35.00 recording fee.
• All owners must occupy or intend to occupy the home as principal residence.
• Owners who are elderly or disabled should file a homestead under section 2 of the new law to gain maximum protection.
• Under new law, both spouses can record a homestead.
• Property held in trust can be homesteaded.
• Every homeowner who has refinanced his/her mortgage in the last several years should record a new homestead declaration since many refinancing mortgages contained a waiver of homestead rights.
• If a married couple has divorced or separated, each should re-examine whether a new homestead declaration is needed.
• As under prior law, homestead declarations are subject to mortgages executed by all owners.

There are other changes in the new law, but these are some of the important ones. I suggest that any homeowner contemplating a Declaration of Estate of Homestead for a principal residence should consult with their attorney with any questions. Under the new Massachusetts Homestead Act closing attorneys or mortgage settlement agents are required to obtain written proof that they have informed borrowers of their right to declare a homestead. The attorney or settlement agent must also discuss the difference between an automatic and a declared homestead that provides additional protection.

Here is a link to the new Massachusetts Declaration of Estate of Homestead Law.

To learn more about the NEW Homestead Exemption Law in Massachusetts, follow this link to The Homestead Act Question & Answers. Changes to the Q&A are currently being made to reflect the new Law.

The Homestead Exemption is governed by statute in each state. Here is a rundown of these laws for your information, but you should check the state codes for the most current version. All amounts are stated in general terms as specific variations may apply.

• Alabama - Up to $5,000 in value, or up to 160 acres in area. - Code of Alabama, § 6-10-2
• Alaska - Up to $64,800, no area limitation. -  Alaska Statutes, § 09.39.010
• Arizona - Up to $100,000, no area limitation Arizona Revised Statutes, § 33-1101
• Arkansas - Up to $2,500 in value, or at least ¼ acre for city homesteads, 80 acres for rural homesteads Arkansas Code, §§ 16- 66- 210 and 218; Arkansas Constitution Article 9
• California - Up to $50,000 in value.  California Code Annotated, §704.730
• Colorado - Up to $45,000 in value, no area limitation Colorado Revised Statutes Annotated, §38-41-201
• Connecticut - Connecticut General Statutes Annotated, § 52- 352b
• Delaware - None - provided Delaware Code Annotated, §4901- 3
• District of Columbia - D. C. provides an exemption equal to owner's aggregate interest in real property (No monetary or area limitations) District of Columbia Code § 15- 501.  DC does not call this a homestead exemption.
• Florida - Exemption equal to value of property as assessed for tax purposes (No monetary limitations) - area limitations of ½ acre urban land or 160 acres rural land Florida Constitution, Article 10 § 4
• Georgia - Up to $5,000 in value, no area limitation. Code of Georgia, Annotated, § 44- 13-1 and 44- 13- 100
• Hawaii - Up to $20,000, but the head of a family and persons 65 years of age or older are allowed up to $30,000, no area limitation Hawaii Revised Statutes, §§ 651- 91, 92
• Idaho - Up to $50,000 in value, no area limitation Idaho Code § 55- 1003
• Illinois - Up to $7,500 in value, no area limitation. Where multiple owners, can be increased to $15,000 Illinois Compiled Statutes, Annotated, § 734 5/ 12- 901
• Indiana - Up to $7,500 for residence, up to $4,000 for additional property, no area limitation. Co-owner, if also a joint debtor, may claim additional $7,500. Annotated Indiana Code, § 34- 55-10-2
• Iowa - No monetary limitation, but a minimum value of $500 - area limitations of ½ acre urban land or 40 acres rural land Iowa Code Annotated, §§ 561.2 and 561.16
• Kansas - No monetary limitation - area limitations of 1 acre urban land or 160 acres rural land Kansas Constitution, Article 15 § 9 and Kansas Statutes, Annotated, § 60-2301
• Kentucky - Up to $5,000 in value, no area limitation Kentucky Revised Statutes, § 427.060
• Louisiana - Up to $25,000, but may include entirety of property in cases of catastrophic or terminal illness or injury. Area limitations of 5 acres urban land or 200 acres rural land Louisiana Statutes Annotated, § 20:1
• Maine - Up to $25,000 in value, but may be up to $60,000 under certain circumstances, no area limitation Main Revised Statutes, Annotated, §4422
• Maryland - Up to $3,000, but in Title XI bankruptcy proceedings, up to $2,500, no area limitation Annotated Code of Maryland, § 11-504
• Massachusetts - Up to $300,000 in value, no area limitation Annotated Laws of Massachusetts, § 188- 1
• Michigan - Up to $3,500 in value - area limitations of 1 acres urban land or 40 acres rural land Michigan Compiled Laws, § 600.6023
• Minnesota - Up to $200,000 in value, but up to $500,000 if used primarily for agricultural purposes- area limitations of ½ acre urban land or 160 acres rural land Minnesota Statutes, Annotated, §510.02
• Mississippi - Up to $75,000 in value - area limitation of 160 acres Annotated Mississippi Code, § 85- 3-21
• Missouri - Up to $8,000 in value, no area limitation Annotated Missouri Statutes, § 513.475
• Montana - Up to $100,000 in value, no area limitation Montana Code, Annotated, §§ 70- 32-101, 70- 32- 104 and 70- 32- 201
• Nebraska - Up to $12,500 in value - area limitation of 2 lots, urban land or 160 acres rural land Revised Statutes of Nebraska, § 40-101
• Nevada - Up to $125,000 in equity, no area limitation Nevada Revised Statutes, § 115- 010
• New Hampshire - Up to $50,000 in value, no area limitation New Hampshire Revised Statutes, Annotated, § 480:1
• New Jersey - No homestead exemption is provided, but an exemption for personal property of up to $1,000 is allowed New Jersey Statutes, Annotated, § 2A: 17- 1 and 2A: 17-17
• New Mexico - Up to $30,000 in value, no area limitation New Mexico Statutes, Annotated, § 2-10-9
• New York - Up to $10,000 above liens and encumbrances in value, no area limitation Consolidated Laws of New York, Annotated, CPLR § 5206
• North Carolina - Up to $10,000 in value, no area limitation General Statutes of North Carolina, Annotated, §1C- 1601 and North Carolina Constitution, Article X
• North Dakota - Up to $80,000 in value, no area limitation North Dakota Century Code, Annotated, § 47- 18- 01
• Ohio - Up to $5,000 in value, no area limitation Ohio Revised Code, § 2329.66
• Oklahoma - Unlimited in value - area limitations of 1 acre urban land or 160 acres rural land. However, where using more than 25% of property for business purpose, the value drops to $5,000. Oklahoma Statutes, Annotated, §§1 and 2
• Oregon - Up to $25,000 in value - area limitations of one city block if within a city or 160 acres rural land Oregon Revised Statutes, § 23.240
• Pennsylvania - No homestead exemption provided, but a general monetary exemption of $300 exists. Pennsylvania Consolidated Statutes, Annotated, §§ 8121, et. Seq.
• Rhode Island - Up to $150,000 in value, no area limitation General Laws of Rhode Island, § 9- 26- 4.1
• South Carolina - Although no homestead exemption is provided, an exemption for personal and real property of up to $10,000 in value may include property claimed as a residence Code of Laws of South Carolina, § 15- 41-30
• South Dakota - No monetary limitation - area limitation of one dwelling house and contiguous lots used in good faith South Dakota Codified Laws, §§ 43-31-1 and 43-31-4
• Tennessee - Up to $5,000, but may be up to $7,500 if claimed by two persons as a homestead, no area limitation Tennessee Code, Annotated, § 26-2-301
• Texas - No monetary limitation - area limitation of 10 acres urban land or 100 acres of rural land if claimed by a single person. A family may claim 200 acres of rural land Texas Property Code, Annotated, §§ 41.001 and 41.002 and Texas Constitution, Article 16 § 51
• Utah - Up to $20,000 in value, but only $5,000 in value if property is not primary residence - area limitation of 1 acre Utah Code, §78-23-3
• Vermont - Up to $75,000 in value, no area limitation Vermont Statutes Annotated, Title 27, § 101
• Virginia - Up to $5,000, but may be increased by $500 for each dependant residing on property, no area limitation Code of Virginia, §34-4
• Washington - Generally, up to $40,000 in value, but may be unlimited if used against income taxes on retirement plan benefits, no area limitation Revised Code of Washington, Annotated, § 6.13.030
• West Virginia - Up to $5,000 in value, but an additional $7,500 may be available in cases of "catastrophic illness or injury," no area limitation West Virginia Code, Annotated, §§ 38-9-1 and 38-10-4
• Wisconsin - Up to $40,000 in value. No area limitation. - Wisconsin Statutes, Annotated, § 815.20
• Wyoming - Up to $10,000 in value. Each co-owner is entitled to a homestead exemption. Wyoming Statutes § 1-20-101