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Mark Cappel
UpdatedMar 8, 2010

What is a homestead exemption, why should I declare my residence a homestead, and how do I do it?

Our home is part of our revocable trust. We owe a lot of money from very high medical bills paid by credit cards. Someone suggested doing a homestead declaration since this was not our primary residence but now is. We have about $300,000 equity. What are the pros and cons and is it a good idea? Some cards are going to be charged off for non-payment and we are afraid we could lose our small home.

The Wikipedia offers a very clear Web page on the homestead exemption, a small portion of which is reproduced here:

"Homestead exemption laws typically have three primary features:

1. They prevent the forced sale of a home to meet the demands of creditors;

2. They provide the surviving spouse with shelter;

3. They provide an exemption from property taxes which can be applied to a home.

"For purposes of these statutes, a homestead is the one primary residence of a person, and no other exemption can be claimed on any other property anywhere, even outside the boundaries of the jurisdiction where the exemption is claimed.

"In some states, homestead protection is automatic. In many states, however, the homeowner must file a claim for homestead exemption with the state, and will not receive the protections of the law until this has been done. Furthermore, the protection can be lost if the homeowner abandons the protected property by taking up primary residence elsewhere.

"In most cases, homestead exemptions do not apply to forced sales to satisfy mortgages, mechanics liens, or sales to pay property taxes."


I see no down-side to declaring a primary residence a homestead. In California and some other states, the homeowner needs to complete a form, sign it in a notary public's presence, and deliver the document to the county clerk or county recorder. See the Sacramento Library for California forms, and your local library if you are outside of California. Contact an attorney in your state if you have questions about the homestead exemption in your state.

I hope this information helps you Find. Learn & Save.