You definitely want your home to be protected after you die. Some states have homestead allowance statutes to make sure that your spouse and any minor children have a place to live after you die. Your homestead is typically defined as your house and may also include a certain amount of adjacent land. (The legal term you may run across is curtilage.) The land aspect of homestead allowances is very important if you live on a farm or any property with a large amount of acres.
Homestead allowance statutes come from the old English common law concepts of dower and courtesy, and you may come across those terms. The purpose of dower and courtesy was to provide a surviving spouse with an interest for the remainder of his or her life in the real property owned by the spouse who died, and therefore have somewhere to live. Dower is the word used for a wife’s interest while courtesy refers to a husband’s interest.
Homestead exemption statutes are closely related to homestead allowance statutes, and apply if your estate needs to pay debts you owe to creditors. If not enough cash is available, the estate is forced to sell off property — real, personal, or perhaps both — to get enough money to pay the creditors. If your estate owes a lot of money for debts, selling off a single high-value item, such as your house, is often easier, rather than trying to sell a lot of smaller items.
So the homestead exemption statutes are intended to prevent your surviving spouse and minor children from being kicked out of your home if property does need to be sold to pay creditors.
Even with homestead exemption statutes, your home can still be subject to a forced sale. Think of these statutes simply as a “first line of defense” rather than an absolutely 100 percent guarantee that your spouse and children can remain in your home if your estate owes a lot of money and that money can’t be raised by selling other property from the estate. Therefore, you need to consider the other parts of your overall estate planning, such as life insurance, to help out the homestead exemption statutes and protect your family and your home.