I have a 79 yr old family friend who just had a stroke and other health issues. She will probably have to go to long term care facility and owns a home. Will the home have to be sold to pay for her long-term care or would she be able to use it as rental income to help pay for her care.
Answer
Generally speaking, she would be able to use the rental income she receives from the home toward her care. Without knowing her specifics, I will assume that she has no spouse or children and that she has taken no steps to plan for this situation. She would generally need to spend her assets down to $2,000 so that she can apply for MassHealth benefits to cover the costs of her long term care. She can spend her assets on pre-planning her funeral or paying for her care or other permissible expenses. Once she is approved for MassHealth benefits, the net rental income as well as her other income (less a small amount set aside for her personal needs) will be used to pay for her care and MassHealth will cover the difference. After she passes, MassHealth will make a claim against her estate for the amount of benefits it paid on her behalf during her lifetime. Her estate will have to pay the MassHealth claim from the proceeds of the sale of her house (and any other assets, although by that time there are usually no other assets).
If she is able, she should speak with an elder law attorney as soon as possible to see what steps, if any, she can take now to protect any assets. If she is not able due to her medical condition, her attorney-in-fact (the person named in her power of attorney, if she signed one) can act on her behalf.
Good luck -
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