1. MontGuide 199815 Using a Homestead Declaration to Protect Your Home From Creditors Revised May 2012 1

2. 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

3. 3 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?

4. 4 Amount of home equity Montana Homestead Declaration protects? 1. $250,000 2. $100,000 3. $ 60,000 4. $ 40,000 5. $ 20,000 Countdown 8

5. 55 Question  What is the $$ amount the homestead allowance protects against creditor claims after you die under the Montana Uniform Probate Code?

6. 6 Amount of homestead allowance after death? 1. $250,000 2. $100,000 3. $ 60,000 4. $ 40,000 5. $ 20,000 Countdown 8

7. Protection Now up to $250,000 in value of a home against most creditor claims 7

8. 8 Summary  Homestead Declaration $250,000 (living)  Homestead Allowance $20,000 (after death)

9. Prior Law Exempt Property  $40,000  $60,000  $100,000 9

10. If previously filed declaration Don’t have to refile to receive $250,000 protection 10

11. What is a Homestead? House, condo, townhouse, manufactured home or mobile home Land on which it sits Any improvements, fences, etc. 11

12. Manufactured Home or Mobile Home Owner does not have to own the land the mobile home/manufactured home is sitting on 12

13. Homestead Must be person’s primary residence 13

14. Not Eligible Doesn’t include:  Home furnishings  Appliances 14

15. Legal Value Amount appearing on the last completed county assessment roll From county treasurer’s office 15

16. Example: Joe’s house:  Assessed value $80,000  Mortgage Balance $50,000  Protection $30,000 16

17. Example: Doug & Laura’s house:  Assessed value = $275,000  Mortgage Balance = $ 10,000  Remaining Balance = $265,000 **** BUT, Maximum Protection is $250,000 17

18. Who Should Sign? Both spouses should sign the declaration Must be notarized 18

19. Who Should Sign? A spouse may acquire interest in property at marriage unless there is a premarital agreement 19

20. Tenants in Common Each own individual interest Can only file for portion of undivided interest 20

21. Tenants in Common: Jack and Jill  Each can file for ½ of $250,000 or $125,000 21

22. 22 Standard Form MSU Extension:  www.montana.edu/ extensionecon/ financialmgtpublications.html

23. Homestead Declaration Form A document that does not meet the requirements is considered Non-standard  Montana Code Annotated  §7-4-2636 23

24. Undo a Declaration Declaration of Abandonment form  www.montana.edu/ extensionecon/ financialmgtpublications.ht ml 24

25. Record Clerk and Recorder’s office In the county where the home is located 25

26. Recording Fees Standard form  $7.00 per page Non-standard form  $7.00 per page plus $10.00 26

27. No Protection Creditor obtains judgment against the homeowner before declaration is filed 27

28. No Protection Against liens for  Services  Supplies 28

29. No Protection Failure to pay the mortgage 29

30. No Protection Bankruptcy, unless filed before bankruptcy was declared 30

31. No Protection Medicaid Estate & Recovery Program Lien on home of homeowner in a nursing home whose medical costs were paid by Medicaid 31

32. MontGuide on the Web www.montana.edu Search “Homestead Declaration” 32

33. MontGuide 199815 Using a Homestead Declaration to Protect Your Home From Creditors Revised May 2012 33