Bankruptcy

Homes In Massachusetts Trusts Protected By Homesteads

By L. Jed Berliner, Springfield & Marlborough, MA Ban

Upsetting a common understanding of an incomprehensible statute, a Massachusetts bankruptcy judge  ruled that a home owned by a trust may be protected by a homestead. 

The February 23, 2010 In re Rodrigues decision (Bankr.D.Mass., Case No. 09-11960-JNF) (Feeney, J.) contradicted the strict construction ruling of the state’s intermediary appellate court’s 1995 Spinelli decision and instead applied the later, liberal construction policy of the state supreme court’s 1996 Dwyer v. Cempellin decision to a home owned by a trust and the application of the homestead statute.

Rodrigues noted that Spinelli’s validity was questioned earlier by In re Szwyd, 346 B.R. 290 (Bankr.D.Mass. 2006) (Boroff, J.) and In re Kahn, 375 B.R. 5 (B.A.P. 1st Cir. 2007)

Massachusetts has an oddball statute protecting homesteads, difficult to understand and even more difficult to apply.  Consider this from  Szwyd at 291 fn. 1: 

This Court feels compelled to express at the onset its growing frustration with the application of the Massachusetts Homestead Statute. … [T]he statute’s ambiguities have proven to be legion and its benefits 1) appear to be available only for those with legal training or resources necessary to locate a registry of deeds and record what is, for the layperson, a relatively complex document, and 2) may be easily and inadvertinently lost by statutory language and conditions that are hyper-technical and often counter-intuitive. 

Full post as published by Bankruptcy Law Network on February 27, 2010 (boomark / email).