Selling your house in Massachusetts for the purposes of assisted living can seem overwhelming. But it doesn’t have to be; in fact, before we begin with this article, we recommend talking to an elder law and estate planning attorney as soon as possible. We are happy to recommend some excellent ones here in Massachusetts who will simplify the process greatly.
In addition, nothing in this article should be taken as legal advice, or advice for your specific situation. Always talk through your options with an attorney, accountant, or other professional.
Is Assisted Living the Best Fit?
The first question to consider is whether in-home care or assisted living is the better fit. You should talk to your doctor about the pros and cons of each. If you are on MassHealth (health insurance for lower-income individuals), have a disability or chronic condition, and get the approval of a physician, the program may cover some of your in-home care costs. There are also state-specific Medicaid waiver programs that could qualify you for in-home care.
As you can tell, it’s a confusing system, so we recommend talking to a state health insurance (SHINE) counselor about your situation by calling MassOptions at 1-800-243-4636, or by calling/visiting your town’s council on aging.
Financing Assisted Living
The next question is whether you should sell your house (or your family member’s house) for the purposes of getting into assisted living or elder care. The answer really depends on how you plan to finance assisted living.
Medicaid
If the elder is eligible for Medicaid (aka MassHealth), which often (but not always) requires having less than $2000 in assets (usually not including the home) and less than $1073 in monthly income, Medicaid will cover the cost of assisted living. So in this case, selling the home is not a must for financial reasons; there may be other life reasons to sell, of course.
But it’s not that simple, as there are no free lunches. Generally speaking, MassHealth is required by federal regulations to recover a person’s elder care costs after that individual dies. So if the MassHealth recipient has assets like a house, MassHealth may place a lien on the property to try and recoup its costs.
There are various exceptions, such as a dependent or spouse still living in the house. There are also ways to protect against this, such as putting the property into what’s called an irrevocable trust. But this needs to happen as soon as possible because doing so could disqualify you from Medicaid-covered assisted living for 5 years. Here it would greatly benefit you to talk to an estate planning attorney, which we are happy to provide.
Home Equity
If you are not eligible for MassHealth, then selling the house might be necessary to finance the cost of assisted living, which can be upwards of 100k per year. The “good” news is that if you sell your house in Massachusetts and use the proceeds to pay for assisted living, MassHealth will usually take over the payments once you’ve spent most of that money. That’s because once you hit $2000 or less in assets, you become eligible for MassHealth. So you won’t have to worry about getting kicked out of assisted living once your funds run out.
The other good thing about selling your house to get into assisted living is you don’t have to do so right away. Many lenders offer what are called “bridge loans”, which are just short-term, 6-12 month mortgages. You can borrow against your house fast to pay the “entry fee” to get into assisted living. Then, once you’ve moved into your new place, you can sell your old house within the next few months.
Where Do We Go From Here?
Okay, that was a lot.
The truth is, this stuff can be a bit of a maze to navigate, and we’ve only just scratched the surface. But it doesn’t have to be stressful; when we buy your house (or your elder’s house), we take care of most of the hassles and make the entire process straightforward.
So if you have any questions or want to chat about your house or your specific situation, feel free to give us a call at (617) 831 6186 and we’ll see what we might be able to do for you.