New Hampshire has a homestead exemption of $100,000, which generally means that after your mortgage both you and your spouse each have a $100,000 protection from creditors. If you and your husband own your home together, and your husband realizes he has some financial troubles in his business and he transfers his interest in the homestead to you for no monetary value, creditors generally can argue under New Hampshire law that they can void such transfer as being fraudulent to the creditor. The creditors need not prove intent to defraud but could show that the transfer was not for reasonable value while the transferor was insolvent.
However, under the same law, there is no such transfer for a creditor to challenge if the interest that was conveyed was subject to a valid exemption, which includes New Hampshire’s homestead exemption.
For example, if a husband and wife together own their home, which has a value of $300,000 and has a $150,000 mortgage, they would have a total of $150,000 in equity meaning that they each have $75,000 of equity. If the husband, while still living in the home, transferred his interest in the home to his wife while he was insolvent and he did not receive any compensation from his wife, there should still be no challengeable transfer. Therefore, if a creditor makes a fraudulent transfer claim seeking an avoidance of the conveyance of one spouse’s half interest in the marital home to the other spouse, it would be extremely prudent for the spouse who received the conveyance to have an attorney evaluate what defenses are available to protect his/her interests.
J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].