Putting the home in Homestead

As many of you probably know, I represent parties in transactions regarding residential properties. I love working with buyer and sellers, starting with Purchase and Sales, and through closing. I happily work with lenders and real estate agents to make sure that the deal not only happens, but that my client is properly protected.
As part of the closing process, I always offer to provide a Homestead for buyers. Most people do not know a lot about Declarations of Homestead, sometimes not even knowing if they have one on their current house; in order to help buyers better understand the benefits of having one, I always provide the information below.
It is never too late to file a Homestead, even if you have lived in your house for 20 years. If you are not sure if have one, I am happy to look it up for you.

Homestead protection is available for owner occupied, residential one to four family homes, condominium unit, operative apartments and for manufactured homes, which in each case serves as the homeowner’s principal residence. Co-owners of a home ‘share’ the exemption amount.

A homestead estate exempts a certain amount of the equity of a home from attachment, seizure, execution on judgment, levy, and sale for the unsecured debts of the owner of the home, except for the following:
• Federal, state, and local taxes, assessments, claims, and liens;
• Liens recorded prior to creation of the estate;
• Mortgages;
• Orders of the probate court for support;
• A levy or sale for ground rents (where the homeowner does not own the land); and
• An execution from a court to enforce a judgment based upon fraud, mistake, duress, undue influence or lack of capacity.

Under the Act, the homeowner’s equity in the home is protected for up to one year after the sale of the home, and, if the home has suffered a casualty that results in the payment of insurance proceeds, then the insurance proceeds are protected for up to two years, in order to allow the homeowner to acquire a homestead in a new (or reconstructed) home.

AUTOMATIC HOMESTEAD: All homeowners are entitled to automatic homestead protection of up to $125,000 of the equity in their homes. You do not need to do anything to benefit of this protection.

DECLARED HOMESTEAD: By making a written declaration of homestead, recorded in the Registry of Deeds, a homeowner’s homestead protection is increased to $500,000.

Some other benefits of declaring a homestead include:
a. A non-owner spouse who lives with the owner has the benefit of the homestead (until terminated in writing);
b. A declared homestead cannot be subordinated to an unsecured debt;
c. If an unmarried owner declares a homestead and marries thereafter, the declaration will automatically benefit the owner’s spouse upon marriage; similarly, a divorce and/or remarriage will not affect the homestead of the spouse who remains in the home as his/ her principal residence.
d. A trustee of property held in trust can declare homestead for the beneficiaries of the trust who occupy the home as their principal residence;
e. Elderly (age 62 or older) and disabled persons who declare homestead are each entitled to separate exemption of up to $500,000, which is personal and not shared with any other co-owners of the home.

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Know Before You Owe

Have you ever purchased a house? If so, you know how stressful it is to have last minute adjustments made to the amount that you must pay at the time of closing. Effective on October 3, 2015, the Consumer Financial Protection Bureau has instituted changes which should make the process less stressful.  Buyers should expect the changes to positively effect future closings with two (2) major changes:

  • Providing Buyers with full disclosure, by postal mail or email, usually from the lender at least three (3) days prior to closing (with additional days allotted for mailing and receipt), thereby eliminating surprises and providing an opportunity to ask questions; and
  • Eliminating excessive documents by using two (2) easy to understand forms, the Loan Estimate and Closing Disclosure.

Along with Residential Mortgages Services, of North Attleboro, and Old Republic Title Insurance, I am sponsoring a free continuing education seminar for real estate agents on these changes, on October 26, 2015. If you are an agent or know someone who might be interested, please contact me for more information and to register.

If you are a potential Buyer or Seller and want more information, please feel free to contact me or check out this link:

Happy Fall!

Three Lawyers and a House

Is the title, “Three Lawyers and a House,”  the start of another lawyer joke? No, not this time. Buying a house is not usually a funny experience. To the contrary, purchasing real estate is usually quite stressful, because it is often the biggest asset and expense that people will have during their lifetime.

Massachusetts General Law ch. 184, Section 17B states, in part, “The responsibility of the attorney for the Mortgagee (aka the entity or organization who is lending the mortgage, typically a bank or mortgage company) is to protect the interest of the Mortgagee. Mortgagors (the person requesting a mortgage, usually the homeowner) may, at their own expense, engage an attorney of their selection to represent their interests in the (closing) transaction.”

Closing attorneys are usually pretty considerate to buyers and seller during the transaction. They typically are open to resolving any last minute negotiations or disputes; however, they are not obligated to do so.

Hiring an attorney to represent your interest is worth the additional expense; the cost is usually minimal, especially considering the overall expense of purchasing a home. What makes it so important to have someone on your side?

1. Buying a house is one of the most important legal agreements an transactions that you will enter into during your lifetime.You want someone to protect your interests and make sure that they are present in the agreement;

2. There are a lot of legal documents that you will be asked to sign and they can be confusing. You want someone who will take the time to explain to you what you are signing, to discuss the implication thereof, and answer your questions;

3. Errors happen even with the best attorney. You want someone to confirm that the terms of the loan are what you expected, because an error could cost you a lot of money during the life of the loan or cause an issue with your Title; and

4. Last minute disagreements between Buyer and Seller are not uncommon. You want someone to advocate for your position and make sure that any resolution is in your best interest.

Mortgagees will often allow your attorney to also appear as their Closing attorney; this is an exception, where the conflict of interest can be waived, assuming that all parties agree. By doing so, you can be assured that the Closing attorney is protecting you.  If you want your private attorney to serve as a Closing attorney, be sure that they are qualified to do so and that they have access to Title Insurance, with a reputable company, such as Old Republic Title Insurance Company, for which I am an Agent.

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Finding the Perfect Lawyer

Everybody seems to know a good lawyer joke. Here’s one to add to your collection:

What do dinosaurs and good lawyers have in common? They are both extinct.

Some attorney jokes are quite funny, but this one makes me cringe. There are plenty of great attorneys in alive and practicing.

At some point, you may need a dinosaur, I mean attorney, to help you with a problem or to plan for the future. If you know an attorney, you would probably call him or her. If it is me, I will gladly either help you or refer you to someone who can. If you don’t know an attorney personally, you might ask some friends or conduct an online search.  Regardless, you want to be sure that you find the correct attorney for you.

Experience is important in hiring any professional.

It is not only important to find an attorney, but to find the right one.  Look for someone who handles the type of cases or matters with which you need help. Even general practitioners, like myself, do not handle all types of legal matters. Although my practice includes doing basic estate plans, I have limited knowledge regarding elder law, which is pretty specialized.  If I were to accept a Medicare or Social Security case, it would not be a service, but rather a disservice, to my clients; however, as a service to my clients who need help with those issues, I am happy to provide them with the names of people who can better assist them.

Understanding your goals should be a priority.

Your attorney should understand both your short term and long term goals. A good attorney incorporates your income, family, education, personality, and lifestyle when presenting legal options that might be appropriate for you. For example, if you are getting divorced and have a two (2) year old child, your attorney should be thinking not only about child support, day care, and activities, but also future college tuition; if not, you are likely 16 years away from appearing before the court to discuss how to pay for college.

Communication between you and your attorney should be simple and basic.

You should be able to easily understand what your attorney is telling you and should always feel comfortable asking for clarification or additional information.   There might be moments when you may misunderstand or disagree with what your attorney is saying, and that is okay, as long as you can discuss your concern and have it rectified to your satisfaction. I always try to end conversations with my clients, by asking, “Did I answer all of your questions?” Sometimes I forget to make the inquiry, but I always hope that they remember that I am open to additional questions.

Availability and accessibility are crucial.

I often hear people state (with frustration) that their attorney has not called them back. Your attorney likely has a busy caseload and outside life, but you should always feel as though you are a priority. Generally, it is reasonable to receive a return telephone call or email within 24 hours, weekends excluded, and with the exception of emergency situations. When I opened my practice ten years ago, I made a conscious decision to use my cellular phone as my exclusive office phone; while this is not the typical phone arrangement, it works for me and my clients seem to appreciate the accessibility.

First impressions should be positive.

When you meet a potential attorney for the first time, you should feel comfortable with that person. Regardless of what kind of case he or she is  helping you with, you will spend a significant amount of time talking with that person. It is very important that you feel as though you can talk with the attorney and confide private information, when necessary and relevant. Don’t be afraid to ask specific questions about the practice. Attorneys have different styles, so it is not uncommon for people to meet with one or two attorneys prior to choosing one to retain.

Fees should be reasonable.

Fees can vary greatly and be assessed in various ways. Some cases are typically billed by the hour, such as a divorce, while others are one price for the entire case, such as an estate plan or some criminal matters, yet others are a percentage of the settlement and contingent upon resolution in your favor. Fees are established on many factors, including, but not limited to, location, size of the practice, experience, reputation, and case load.  Your attorney should explain how you will be billed for services rendered and provide a Fee Agreement for you both to sign. The Fee Agreement should not only explain the fees, but also state the responsibilities of both the client and the attorney.  Similarly, he or she will likely expect a payment or “retainer” prior to beginning your case.  A smaller retainer is not always better, because the attorney will likely ask for replenishment of the retainer when it is running low; the larger retainers often are based on a better assessment of what the case will actually cost to litigate.

Fending off problems before they occur.

A good attorney can identify potential problems before they occur and assist you to avoid them.  Similarly, your attorney should be prepared to aggressively argue your case, including up to and through a trial; however, your attorney should also be discussing how to minimize conflict if and when it is in the best interest of resolution.

As always, please feel free to contact me for additional information.