Legal Question in Wills and Trusts in California

A declared homestead limits the extent to which a subsequently recorded judgment lien, other than a judgment lien based on a judgment for child or spousal support, will attach to the declared homestead. When there is a declared homestead, a judgment lien will attach only to the surplus value of the property over the amount of the homestead exemption set forth in Code of Civil Procedure section 704.730 plus the amount of all liens and encumbrances on the declared homestead at the time the abstract of judgment is recorded to create the judgment lien. (Code of Civ. Proc., � 704.950.)

Recordation of a declared homestead also provides an advantage for a judgment debtor at any future hearing in which a judgment creditor seeks to challenge the existence or amount of a homestead exemption in that the judgment creditor has the burden of proof at the hearing. (Code of Civ. Proc., � 704.780 subd. (a)(1).) If no declaration was recorded, the burden would be on the judgment debtor to prove that the property sought to be levied was the homestead.

Finally, and importantly, if a homestead declaration is recorded prior to the operative date of any amendment to Code of Civil Procedure section 704.730 that increases the amount of the homestead exemption, the amount of a declared homestead exemption is increased by the same amount. If a judgment creditor has obtained a lien on a declared homestead prior to the operative date of any amendment increasing the exemption amount, the amount of the declared homestead exemption remains the amount in effect at the time the lien attached. (Code of Civ. Proc., � 704.965.)

The amount of the homestead exemption is not fixed, and varies depending on the age of the judgment debtor, and family relationship. A judgment debtor may claim a homestead exemption in the amount of $75,000. (Code of Civ. Proc., � 704.730 subd. (a)(1).) If the judgment debtor or his or her spouse who resides in the homestead is, at the time of the attempted sale of the homestead, a member of a family unit, he or she is entitled to an exemption in the amount of $100,000.00. There must be 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. (Code of Civ. Proc., � 704.730 subd. (a)(2).)

The amount of exemption is increased to $175,000 if the judgment debtor or his or her spouse who resides in the homestead is, at the time of the attempted sale of the homestead: 1) 65 years of age or older; 2) physically or mentally disabled and, as a result of that disability, unable to engage in substantial gainful employment; or 3) 55 years of age or older with a gross annual income of not more than $15,000, or if married, a gross annual income, including the gross annual income of his or her spouse, of not more than $20,000 and the sale is an involuntary sale. (Code of Civ. Proc., � 704.730 subd. (a)(3).)