Automatic and Declared Homesteads

 California Homestead Laws

 

California homeowners have two types of Homestead Exemption procedures available to establish the priority of the homestead equity they have in their home:

        The Automatic Homestead Exemption or Statutory Homestead Exemption, and

 

        The Declaration of Homestead which is recorded in the County Recorderís Office.

Both homesteads provide the same home equity protection provided to all homeowners in California. Notwithstanding, under a Declaration of Homestead, additional benefits are available to homeowners. Most importantly, under the recorded Declaration of Homestead, homeowners have the right to sell and reinvest their exempt equity into another house.

As of January 1, 2010, homeowners qualify for one of three amounts of net equity homestead protection:

704.730.  (a) The amount of the homestead exemption is one of the following:
(1) Seventy-five thousand dollars ($75,000) unless the judgment debtor or spouse of the judgment debtor who resides in the homestead is a person described in paragraph (2) or (3).
(2) One hundred thousand dollars ($100,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead a member of a family unit, and there is at least one member of the family unit who owns no interest in the homestead or whose only interest in the homestead is a community property interest with the judgment debtor.
(3) One hundred seventy-five thousand dollars ($175,000) if the judgment debtor or spouse of the judgment debtor who resides in the homestead is at the time of the attempted sale of the homestead any one of the following:
(A) A person 65 years of age or older.
(B) A person physically or mentally disabled who as a result of that disability is unable to engage in substantial gainful employment. There is a rebuttable presumption affecting the burden of proof that a person receiving disability insurance benefit payments under Title II or supplemental security income payments under Title XVI of the federal Social Security Act satisfies the requirements of this paragraph as to his or her inability to engage in substantial gainful employment.
(C) A person 55 years of age or older with a gross annual income of not more than fifteen thousand dollars ($15,000) or, if the judgment debtor is married, a gross annual income, including the gross annual income of the judgment debtor's spouse, of not more than twenty thousand dollars ($20,000) and the sale is an involuntary sale.
(b) Notwithstanding any other provision of this section, the combined homestead exemptions of spouses on the same judgment shall not exceed the amount specified in paragraph (2) or (3), whichever is applicable, of subdivision (a), regardless of whether the spouses are jointly obligated on the judgment and regardless of whether the homestead consists of community or separate property or both.
Notwithstanding any other provision of this article, if both spouses are entitled to a homestead exemption, the exemption of proceeds of the homestead shall be apportioned between the spouses on the basis of their proportionate interests in the homestead.

Homeowners that are anticipating the need to rely on a homestead exemption for protection against creditors should immediately consult with an experienced attorney.

Call us for a no cost initial consultation.

 
 
 
 



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