January 26, 2005

Hi Everybody,

Typically, I’m not one to sing the praises of insurance coverage. In fact, I usually view insurance as one of those necessary evils in the same category as flossing your teeth and limiting your intake of fried foods. But a deal on some cheap and effective “insurance” just got a little better and I wanted to give you a heads up.

Many of you may already know about the “Homestead Exemption.” It is a Massachusetts law that, when invoked, allows homeowners to protect a portion of their home equity from the claims of creditors. In essence, it allows you to insure a portion of your built up equity from lawsuits and other claims that may arise in the future. What it will not protect against are mortgages, real estate tax liens, Medicaid liens and pre-existing claims.

So what’s new? Well, the amount of the “Homestead Exemption” just went up from $300,000 of coverage to a limit of $500,000. So in most cases, home equity (fair market value minus mortgages) of up to a half million dollars can now be protected from unforeseen claims. And in today’s landscape, we know those claims can come from almost any direction.

So how do you do it and how much is it? The “exemption” needs to be recorded at the Registry of Deeds. The recording fee is $35 and if you have an attorney help with the paperwork, it will probably cost you an additional $150. So for a one-time fee of $185, you get a half a million of liability protection for as long as you own your home. Even for a skeptic like me, that sounds like a pretty good deal.

As always, if you have any questions please give us a call, 978-256-1323.

Jim