Medicaid Planning

What is Medicaid planning?

Let’s start with what it is not. It is not a means to hide assets or to make undisclosed gifts. Rather, it is a means to gain Medicaid eligibility while operating within the bounds of the law, while preserving as much of the assets as is feasible.

Medicaid planning normally takes place when a person is admitted to a nursing home or an admission date is imminent and, among other things, involves an analysis of income and assets to determine how best to gain Medicaid eligibility. Texas has a myriad of rules, regulations, policy interpretations and statutes that a person must honor when coming up with a plan.

For example, Texas is an “income cap” state and the current income cap is $2,130.00. Many people think that the monthly income is that amount which is deposited into the bank. However, one nuance of Texas law is that the gross monthly income of the Applicant is used for Medicaid eligibility purposes. As a result, you can make an incorrect determination of eligibility for Medicaid benefits simply by looking at net, rather than gross, monthly income. The solution for an income cap dilemma is a Qualified Income Trust or Miller Trust. If done correctly, the Qualified Income Trust solves the problem of having too much income to qualify for Medicaid, but not enough income to pay the nursing home. See the page on our website relating to Miller Trusts for more specific information.

Another commonly used planning tool is a Lady Bird Deed. Generally speaking, we use Lady Bird Deeds to transfer the homestead at death to avoid Medicaid Estate Recovery. Estate Recovery occurs when someone who has received Medicaid benefits passes away and the Medicaid Estate Recovery Program (“MERP”) attempts to recover those funds. See the page on our website devoted to Lady Bird Deeds for more specific information.

For married couples, the rules can be very generous for the at-home spouse (Community Spouse). Contrary to popular belief, the Community Spouse is frequently allowed to keep ALL of the assets and monthly income and still have his/her spouse qualify for nursing home Medicaid. Many times, planning for a couple also involves changing the character of property from community to separate and then transferring it from spouse to spouse.

Our firm handles Medicaid issues on a state-wide basis and we can generally tell you after a short interview if a Medicaid plan would benefit the potential applicant. Many people we talk with do not need a full-blown Medicaid plan, but rather need someone who is experienced to review their situation and give them the peace of mind of knowing they are headed in the right direction. Our law firm charges a fee of $300.00 for a one hour consultation. In order to get the most out of this consultation, bring the documents listed below with you for review by the attorney.

What does it cost?

Generally, the legal fee is a “flat fee” and is quoted during the initial consultation. The legal fee is due up-front once you decide to implement the plan that we have recommended. Flat fees do not include representation at a fair hearing or for an appeal, if either are necessary.

What will I have to provide the attorney?

  • The gross income and countable assets of the Medicaid Applicant and Community Spouse (if applicable), including the taxable value of any real estate, and regardless of whose name the asset is held;
  • Name of the Attorney-in-Fact for the Medicaid Applicant, and copies of the Powers of Attorney upon which he/she relies;
  • The name of the nursing home (or proposed nursing home) where the Medicaid Applicant is a resident or which is being considered, as well as the cost of care at that home.
  • Applicant’s driver’s license or state ID;
  • Applicant’s Social Security card;
  • Applicant’s Medicare card;
  • Applicant’s Supplemental insurance card;
  • Copies of any pre-need funeral contracts;
  • Copies of any deeds to burial plots;
  • Wills of the Applicant and Community Spouse;
  • Cash value life insurance policies for Applicant and Community Spouse; and
  • Deed to homestead and any other real estate owned.



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This site has been prepared by Richard G. Mills, Attorney at Law of Duncanville, Texas, and Timothy Schultz, Attorney at Law of San Antonio, Texas, for informational purposes only. View Legal Notice