Changes appear to be in the offing for the California Homestead Exemption Law. On May 22, 2015, the Senate passed Senate Bill 308 that may result in extensive modification of the Homestead Exemption. The bill is now in the Assembly awaiting action. Pundits expect it to pass, be signed by the Governor and become law.
Under the current law the Homestead Exemption exempts from levy by creditors $75,000, $100,000, or $175,000 in equity in the principal place of residence of a homeowner, depending on whether the homeowner is single, married, has dependent children, has a disability or is over the age of 65. Proceeds from the voluntary sale of a declared homestead are also exempt from levy for six months. In addition, under the law aggregate equity in motor vehicles exempt from attachment and sale is $2,900; and all amounts in private retirement plans, including self-employed retirement plans and individual retirement annuities or accounts qualified under Federal Internal Revenue Code of 1986 under existing law are protected from levy.
Senate Bill 308 would impose a $300,000 equity exemption for all, rather than the existing scale based on status; would make proceeds from the voluntary sale of a declared homestead indefinitely exempt from levy; raise the exemption from levy to $3,000 for motor vehicles; and expand the Individual Retirement Account Exemption to include individual retirement accounts that do not qualify under existing law on the basis of a technical defect.
The anticipated new law provisions will provide individuals with greater protection from creditors, especially for homeowners who record declared homesteads.
We economically prepare and record declared Homestead documents so you can take advantage of the protections afforded by existing law and the greater protections that will be provided by Senate Bill 308 should it become law.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
Leave a Reply