F EINMAN L AW O FFICES Business & Trial Lawyers

The Bank of America Building

23 Main Street, Andover, Massachusetts 01810 Fax: 978.475.0852
Telephone: 978.475.0080 URL: http://www.feinmanlaw.com
Michael B. Feinman* Email: mbf@feinmanlaw.com
Stephen P. Shannon* Email: sps@feinmanlaw.com
Tali A. Tomsic Email: tat@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?
Contents of Declaration
• Each owner to be benefited and the
owner’s non-titled spouse must be
identified per §5(a)(1). Minor
children are covered, per §1 ¶4.
• Declaration must state that “each
person named therein” occupies or
intends to occupy the home as their
principal residence.
• “Signed and acknowledged under
penalty of perjury” by each owner
or by the trustee, per §5(a).
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Issues:
How are owners identified?
What is sufficient identification?
What about non-minor children?
Perjury acknowledgment is new.
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. Agin v. Mortg.
Elec. Registration Sys., Inc. (In re
Giroux), Adv. No. 08-1261, 2009
Bankr. LEXIS 3429 (Bankr. D.
Mass. May 21, 2009) (mortgage
should not have been accepted
for recording because of
defective acknowledgement).
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, and occupy or version of statute.
intend to occupy the premises.
• For a disabled person, must also
record one of (1) Original or
certified copy of SSA disability
award letter, or (2) Doctor’s letter
certifying that the declarant meets
the SSA disability requirements.
• These requirements are the same as
under prior law.
• Stacking of exemptions is
permitted with multiple owners
per §1, ¶2

Suggested form for Acknowledgment

On this ______ day of _________, 20____, before me, the undersigned notary public,
personally appeared _______________________, proved to me through satisfactory evidence of
identification, which were _________________________, to be the person who signed on the
preceding or attached document, 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.

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Effect of Subsequent Homestead
Issues:
• Executing a new homestead does
not terminate any pre-existing
protection, per §10.
– Overrules cases like In re
Leigh, 307 B.R. 324 (Bankr.D.
Mass. 2004).
• If a homestead declaration is found Does §4 provide for an “automatic”
to be invalid, any prior homestead exemption of the homestead if a prior
exemption is restored, per §4 ¶2. homestead is invalid?
– This rule does not resurrect
a homestead that was Does the automatic homestead still
terminated under §10(a)(5) apply under §10(c)?
because the owner
homesteaded other
property.

Mortgages
Issues:
• Homesteads are automatically
subordinate to mortgages, per §9 ¶1. What if the mortgage is signed by
• Homestead-waiver clauses fewer than all of the owners or record,
ineffective except as a statement of per §9 ¶1?
subordination, per §9 ¶2.
• Mortgagees may not require
releases of homestead, per §9 ¶2.
• Confirms cases like In re Heretakis,
293 B.R. 82 (Bankr. D. Mass. 2003)

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Priority
Issues:
• In addition to mortgages, per §9,
the following have priority over a
recorded homestead per §3(b):
– Sale for federal, state and
local taxes, assessments,
claims and liens
– Liens recorded prior to Previous exception for “debt
“creation of the estate of contracted prior to the acquisition of
homestead” said estate of homestead” is omitted.
– Court-ordered support • Patriot Portfolio, LLC v. Weinstein (In re
payments Weinstein), 164 F.3d 677 (1st Cir.
– Attachment, levy, or sale for 1999) is still good law when
ground rent applying the law in a bankruptcy.
– Execution on judgment for
fraud, mistake, duress, What type of fraud?
undue influence, or lack of
capacity
• Automatic priority over the Are disclaimers required?
homestead exists for certain
unsecured credit transactions
under $20,000, per §4 ¶3.

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Multiple Owners
Issues:
• General Rules:
– Joint and entireties owners
share a “whole and
unallocated” exemption, per Are life estates covered?
§1 ¶2(1) What about remainder interests?
– Common owners and co-
beneficiaries are protected
in proportion to their What happens when some owners sign
fractional interests, per §1 a declaration and others do not?
¶2(2)
• Elderly/disabled homesteads can be
stacked per §1 ¶¶(3), (4), while What about combinations of elderly
other homesteads can’t. and non-elderly owners?
– Answers question left open
by Garran v. SMS Financial V,
LLC, 338 F.3d 1 (1st Cir.
2003).

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What is a “Home”?
• Single or 2 to 4 family dwelling,
plus “accessory structures
appurtenant thereto and the land
on which it is located”, per §1 ¶6
– Probably excludes non-
continguous land. Aldrich v.
Gaskill, 64 Mass. (10 Cush.)
155 (1852) is probably
overruled.
• Manufactured home (i.e., a trailer)
– Declarant no longer needs
to be elderly or disabled.
– Declaration recorded in
registry, not town clerk’s
office
• Residential condominium or co-
operative unit is covered
• Life estates are probably covered,
while remainder interests may not
be covered.
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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.
See In re McComber, 422 B.R. 334
(Bankr.D.Mass. 2010), see In re
Fiffy, 281 B.R. 451
(Bankr.D.Mass. 2002), rev'd In re
Fiffy, 293 B.R. 550 (1st Cir. BAP
2003)
Proceeds
Issues:
• Proceeds of sale exempt for one
year or until acquisition of new
principal residence, 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, per §11
• Probably overrules In re Thurston,
2007 Bankr. LEXIS 2207, No. 99-
11836 (Bankr. D. Mass. June 27,
2007) (proceeds of civil action for
flood damage not exempt)
• Pasquina v. Cunningham (In re
Cunningham), 513 F.3d 318 (1st Cir.
2008) and §522(c) maintain
exemption during case and after
discharge

Termination
Issues:
Termination must take place as set forth in
§10 or §2(b). Should a conveyance require non-titled
• Benefits of homestead extend to spouses to sign a deed to get good, clear
non-titled family members per title?
§5(a), §1 ¶5.

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Marriage, Death, and Divorce
Issues:
• New spouse automatically gains
the benefit of a §3 homestead, per §7
– Confirms theory of In re
Melber, 315 B.R. 181 (Bankr.D.
Mass. 2004).
– But not a §2 homestead
• Declared (but not automatic)
homestead survives death or
divorce for the benefit of spouse
and minor children, per §7
• Separated spouses’ declared Can a separated spouse claim an
exemptions on separate properties exemption in the martial residence?
cannot total more than one Can a separated spouse claim an
exemption, per §4 ¶2 exemption in a separate residence?
• Minor children are covered, but not
those over 18.
• With a divorce complaint pending,
spouse and minor children may Does this protection extend to curtail
enjoy use and occupancy until actions of creditors?
order of the Probate Court, per §6.

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Old Traps Gone – New Issues
Issues:
• In re Gunnison, 397 B.R. 186 (Bankr.
D. Mass. 2008) (H’s homestead
trumped separated W’s prior
homestead on her new home)
– But, per §5(d), “both estates
of homestead together shall
not exceed the declared
homestead exemption”
• In re Kelly, 334 B.R. 772 (Bankr. D.
Mass. 2005) (55-year-old couldn’t
homestead a trailer)
– Per §1, anyone can
homestead a trailer
• Hildebrandt v. Collins (In re
Hildebrandt), 320 B.R. 40 (B.A.P. 1st
Cir. 2005) (debtor lost homestead
by deed from he and ex-girlfriend to
himself)
– Per §10(b), this deed
“between . . . co-owners
who . . . individually hold an
estate of homestead” does
not terminate the pre-
existing homestead
• Asst. Recorder of the North Registry Dist.
of Bristol County v. Spinelli, 38 Mass.
App. Ct. 655 (1995) (can’t
homestead trust property)
– Per §5(a)(4) the trustee can
record a declaration of
homestead, which benefits
the trust beneficiaries
• In re Chew, 496 F.3d 11 (1st Cir. 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.

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