Trevor Pincock - Washington Homestead Exemption Changes

A Positive Development for Seniors and Other At-Risk Homeowners

Trevor Pincock, Lukins & Annis, P.S.

The Washington State Legislature recently changed the homestead exemption from $40,000 to $125,000. The change, which took effect in July 2007, provides increased protection for judgment and bankruptcy debtors by protecting an increased amount of home equity, but makes it more difficult for creditors and bankruptcy trustees to force home sales. The increased exemption protects a greater amount of home equity from judgments and other types of involuntary liens placed on homestead property. The increase does not affect liens such as mortgages and deeds of trust, which are voluntarily placed on property.

The homestead exemption automatically protects property from and after the time the property is occupied as a principal residence by the owner. Generally, a homestead is exempt from attachment and from execution or forced sale for the debts of the owner up to a certain amount. Prior to July 2007, the exemption protected up to $40,000 of a debtor’s equity in his property, but the new law increases the protection up to $125,000.

In order to qualify for the homestead exemption, property must be improved and used as the homeowner’s primary residence. The exemption is automatic in most cases, but must be declared by filing a homestead declaration with the county auditor if the property is improved or unimproved land that is not yet occupied as a principal residence. An owner may only claim the homestead exemption on one property. If the owner owns other property in which she resides, or property that has previously been claimed as a homestead, a declaration of abandonment must be recorded for that other property.

It should also be noted that a homestead is considered abandoned if the owner vacates the property for a continuous period of six months. A homeowner may file a declaration of nonabandonment if she is going to be gone for more than six months but does not intend to abandon the homestead, and has no other principal residence during the period of absence. The declaration must be filed with the county auditor in the county in which the property is located.

There are no qualifiers to Washington’s homestead exemption. Unlike California, which allows an exemption of $150,000 for those who are over 65 years old or disabled, but sets a cap at $50,000 or $75,000 for others, Washington’s exemption is set at $125,000 regardless of circumstances.

Although the new exemption amount appears to be a large increase, it’s actually in line with other states’ homestead exemptions. Montana’s exemption amount is $100,000, and Idaho recently increased its homestead exemption from $50,000 to $100,000.

Trevor Pincock is an attorney practicing real estate and business law at Lukins & Annis, P.S. To contact Trevor, click here.

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