Three Ways the Homestead Exemption Ends
The homestead exemption protects your primary residence from most creditors, but that protection is not permanent. The law identifies three events that constitute abandonment of the homestead.
A homestead may be abandoned by any of the following: 1. A declaration of abandonment or waiver. 2. A transfer of the homestead property by deed of conveyance or contract for conveyance. 3. A permanent removal of the claimant from the residence or the state. A claimant may remove from the homestead for up to two years without an abandonment or a waiver of the exemption.
A.R.S. § 33-1104(A)Filing a written declaration of abandonment with the county recorder ends the exemption right away. Selling or transferring the property by deed also ends it. Permanently moving away from the home triggers abandonment as well. However, the law gives homeowners a generous two-year window before a temporary absence becomes permanent.
Trusts and Existing Liens Are Protected
One of the most important provisions in this statute addresses living trusts. Transferring your home into a revocable trust where you keep the power to manage and revoke the trust does not abandon the homestead. This is critical for estate planning, because many families use a revocable living trust as the foundation of their plan. Whether you own a house or a mobile home, this rule applies.
A transfer of the homestead property by deed of conveyance or contract for conveyance under a trust, as defined in section 14-1201, in which the claimant retains the power to administer and revoke the trust shall not constitute an abandonment of the homestead.
A.R.S. § 33-1104(E)The statute also confirms that any recorded consensual lien, such as a mortgage or deed of trust, is not affected by the homestead claim. Your lender's rights remain intact regardless of the exemption. Community property rules under A.R.S. 25-214(C) still apply to any conveyance or encumbrance of the home.
What This Means for Families
Families who travel for extended periods or maintain seasonal residences should know about the two-year rule. If you leave your home temporarily, the exemption stays in place for up to two years. This is helpful for families who relocate for work, care for family members in another state, or spend part of the year elsewhere.
The trust protection is equally important. Many families transfer their home into a living trust to avoid probate. This statute ensures that doing so does not eliminate the homestead protection. As long as the person who created the trust keeps the ability to revoke it, the exemption continues as if the transfer never happened.