Transcript Turning Point 2010 version

Using a Homestead
Declaration to
Protect Your
Home From
Creditors
MontGuide 199815
Revised May 2012
1
Marsha A. Goetting
Ph.D., CFP®, CFCS
Professor & Extension Family Economics
Specialist
Dept. of Agricultural Economics & Economics
Keri D. Hayes
Publications Assistant
Dept. of Agricultural Economics & Economics
2
Question

What is the $$ amount
of equity in your home
that a Montana
Homestead Declaration
(if recorded) protects
against most creditor
claims while you are
alive?
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Amount of home equity Montana
Homestead Declaration protects?
1.
2.
3.
4.
5.
$250,000
$100,000
$ 60,000
$ 40,000
$ 20,000
0%
$250,000
0%
$100,000
0%
0%
$60,000
$40,000
0%
84
$20,000
Countdown
Question

What is the $$ amount the
homestead allowance
protects against creditor
claims after you die under
the Montana Uniform
Probate Code?
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Amount of homestead
allowance after death?
$250,000
2. $100,000
3. $ 60,000
4. $ 40,000
5. $ 20,000
1.
0%
$250,000
0%
$100,000
8
0%
0%
0% 6
$60,000
$40,000
$20,000
Countdown
Protection
•Now up to $250,000
in value of a
home against
most creditor
claims
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Summary
 Homestead
Declaration
•$250,000 (living)
 Homestead Allowance
•$20,000 (after death)
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Prior Law
• Exempt Property
 $40,000
 $60,000
 $100,000
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If previously
filed declaration
•Don’t have to
refile to receive
$250,000
protection
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What is a Homestead?
• House, condo, townhouse,
manufactured home or
mobile home
• Land on which it sits
• Any improvements,
fences, etc.
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Manufactured Home or
Mobile Home
•Owner does not have to
own the land the mobile
home/manufactured
home is sitting on
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Homestead
•Must be person’s
primary
residence
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Not Eligible
•Doesn’t include:
 Home furnishings
 Appliances
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Legal Value
• Amount appearing on
the last completed
county assessment
roll
• From county
treasurer’s
office
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Example:
• Joe’s house:
Assessed value
$80,000
Mortgage Balance $50,000
Protection
$30,000
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Example:
•
Doug & Laura’s house:
Assessed value
=
 Mortgage Balance =
 Remaining Balance =

$275,000
$ 10,000
$265,000
• ****BUT, Maximum
Protection is $250,000
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Who Should Sign?
• Both spouses
should sign
the declaration
• Must be
notarized
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Who Should Sign?
• A spouse may
acquire interest in
property at marriage
unless there is a
premarital
agreement
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Tenants in
Common
•Each own individual
interest
•Can only file for portion
of undivided interest
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Tenants in
Common:
• Jack and Jill
Each can file for ½
of $250,000 or
$125,000
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Standard Form
• MSU Extension:
 www.montana.edu/
extensionecon/
financialmgtpublications.html
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Homestead
Declaration Form
• A document that does not
meet the requirements is
considered Non-standard
 Montana Code Annotated
§7-4-2636
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Undo a Declaration
• Declaration of
Abandonment
form
www.montana.edu/
extensionecon/
financialmgtpublications.ht
ml
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Record
•Clerk and Recorder’s
office
•In the county where
the home is located
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Recording Fees
•Standard form
 $7.00 per page
• Non-standard form
 $7.00 per page plus
$10.00
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No Protection
•Creditor obtains
judgment against the
homeowner before
declaration is filed
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No Protection
•Against
liens for
 Services
 Supplies
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No Protection
•Failure to
pay the
mortgage
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No Protection
•Bankruptcy,
unless filed
before bankruptcy
was declared
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No Protection
• Medicaid Estate &
Recovery Program
•Lien on home of
homeowner in a nursing
home whose medical costs
were paid by Medicaid
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MontGuide
on the
Web
• www.montana.edu
Search “Homestead
Declaration”
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Using a Homestead
Declaration to
Protect Your
Home From
Creditors
• MontGuide 199815
Revised May 2012
33