Monday, March 16, 2009

Homestead Exemption Includes Contiguous Lot

A new case from the Court of Appeals, Division III, Marriage of Baker, docket # 27242-7 affirms and expands state law regarding the Homestead Act.

Over 100 years old, the Homestead Act was designed to protect the family home from creditors, regardless of financial misfortune. In its modern form, the act shields the first $125,000 of the home from levy and execution.

Thus, if you have a $400,000 home and someone files a lien, they can only expect to take $275,000 from the sale of the house, even if the lien is for more.

The issue here was whether the homestead included the house and the lot the house was built on, or, in addition, another contiguous lot owned by the same person. The creditor levied on the contiguous lot, but not the house and primary lot.

The trial court held that the homestead included the contiguous lot. The court of appeals affirmed.

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