I’m attorney Paul Bernstein of the Bernstein Law Group. Are you aware that there are over 40 million lawsuits filed in the United States each and every year?
Two potential arguments to defend yourself
And if you find yourself in the very unlucky position where someone is threatening to sue you, you really only have two arguments to defend yourself with. The first argument is that it’s not your fault. If it can be proven that it is your fault, then the second argument you have is that things aren’t as bad as they’re saying they are. What they’re suing you for isn’t as bad as they’re saying it is. Those are your two arguments.
What if you fail?
If you fail on both of those arguments, then you better hope that you have liability insurance to cover the lawsuit judgment that’s going to be handed to you from the jury and the judge. And if you don’t have coverage for what you’re being sued for, or the lawsuit is so large that it exceeds the limits of your insurance policy, then the person that successfully sued you will come after your assets, including your home.
Homestead protection may not be enough
If you own a home in Massachusetts, you have something known as the homestead protection. This is where the mistake comes in. If you rely on the default homestead protection, you only have protection of $125,000 of equity in your home. If your home has equity more than $125,000, the person that has successfully sued you can go and take the rest of your home’s value.
A declaration of homestead
The mistake is not taking an important second step after you’ve purchased your home, and that is getting something known as a declaration of homestead filed at the registry of deeds.
This one-page form, the minute you file it at the registry of deeds, increases your homestead protection from $125,000 to $500,000. Not filing it is a big mistake. Many people fail to have the declaration of homestead filed at the registry of deeds, the same registry where their home deed is filed. It’s a very simple document.
How to get one
You can check at the registry of deeds online for your county in Massachusetts to see if you have a declaration of homestead. It’s a very easy search. Just look for your home’s records to see if there’s a homestead recorded as well. And if you find that you don’t have one, most registries have a homestead form right online.
You can download it and fill it out. Then you file it at the registry of deeds, along with a $35 registration or filing fee. And then you have that increased homestead protection of $500,000 of added equity protection.
If you own the house with your spouse and you’re both over the age of 62, there’s actually an increased amount of homestead protection available. That increased amount effectively doubles the 500,000 to a million dollars. So it’s really important that you don’t make this mistake.
What you should do right now
Check with the registry of deeds. See if you have a homestead filed. If it was never filed, then make sure you go and get it filed. It’s a simple process. Don’t make this mistake.
If you have any other questions, feel free to reach out to us at the Bernstein law group. And if you have asset protection or estate planning concerns, were here to help you.