Elder Law FAQ
Elder law focuses on helping senior citizens with issues they commonly face, including health concerns, wills and trusts, long-term care and housing, social security and retirement, nursing home Medicaid applications and other matters. The practice of elder law includes advance planning for long-term care as well as emergency access to government benefits and care, with a focus on protecting family assets to the greatest extent possible.
Click on the links below to get answer to frequently asked questions about elder law in Texas.
The state of Texas requires that a Medicaid applicant have no more than $2,000.00 in countable resources. The key point here is whether or not your resource is countable. The Medicaid program allows you to exclude for application purposes many things, including the value of your homestead (up to $500,000), one automobile of unlimited value, your home furnishings, burial plots, up to $1,500.00 for burial expenses and other enumerated items. If, after accounting for your exempt resources, you still have more than $2,000 in countable assets, you will not be able to qualify for Medicaid benefits until those funds are spent for your care or you undergo some type of Medicaid planning with your attorney.
The Medicaid program has the ability to place a claim on a recipient’s probate estate under the Medicaid Estate Recovery Program (MERP). This includes laying a claim for reimbursement from the recipient’s homestead property after he or she passes away. However, a vital limitation to this power is that Medicaid is limited only to the recipient’s probate estate. Therefore, if the home is transferred to the recipient’s heirs outside of probate, Medicaid will be prevented from laying a claim against it.
No. In fact, without properly planning for such a gift, that may be the worst thing you can do. Medicaid has instituted a five-year look-back period, which means any uncompensated transfer of property (a gift) occurring within five years and one month of your application date will be looked at and will create a penalty period. During the time of the penalty, Medicaid will not pay for vendor payments (payments to the nursing facility). Instead, you or your family will have to make those payments to the nursing home. The length of penalty is determined by the amount of transferred property (gift amount).
A Ladybird deed is a special type of real-estate conveyance that reserves in the grantor a life-estate along with some other very special powers. The life-tenant/grantor keeps the right to take back the property or name subsequent grantees. For taxing and Medicaid purposes, this is an incomplete transfer. Therefore, Medicaid allows the life-tenant to exclude the value of the home as his or her homestead. At the same time, however, the transfer/gift “vests” in the recipient (oftentimes the Medicaid recipient’s heirs) at the time of death and the home does not become part of the recipient’s probate estate. This protects the home from the Medicaid Estate Recovery Program.
In order to qualify for Texas Medicaid in 2018, a nursing home resident’s monthly income must be less than $2,250 (in addition to resource limits and other requirements). If a Medicaid applicant has income greater than the $2,250 cap, then a “Miller Trust” or “Qualified Income Trust” can be created to receive the income, pay a small personal needs allowance to the nursing home resident, pay a monthly allowance to a spouse, if any, and pay the remaining funds to the nursing home as the resident’s cost of care.
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