How to Protect Assets from Nursing Home Costs in Houston, Texas

Long-term care is one of the biggest financial threats many families face. If you or a loved one ever need nursing home care in Houston, the costs can be overwhelming. Without careful planning, everything you worked for—your home, savings, and financial stability—could be at risk.

Medicaid may provide benefits to assist with nursing home care, but qualifying is not as simple as filling out a form. Texas Medicaid rules include income and asset limits, along with rules that penalize certain transfers. This is why asset protection planning is so important.

Whether you are planning ahead or facing a crisis, there are legal strategies that can help protect assets from nursing home costs and keep more options on the table for your care and your family.

The Risk Nursing Home Costs Pose to Your Assets

Based on current estimates, the average cost of a semi-private room in a Texas nursing home exceeds $5,000 per month. For those who need more privacy, a private room can cost well over $7,000 each month. While long-term care insurance is one option, many aging adults either do not have it or discover it will not cover everything. This leaves families paying out of pocket unless Medicaid steps in.

Unfortunately, Medicaid eligibility rules in Texas limit the value of assets and monthly income you can have. To qualify, your countable resources, including liquid assets like checking, savings, investments, and some real property, must be very low. If they are not, you may be forced to spend them down before receiving benefits.

This is where Medicaid planning becomes essential.

Medicaid Planning in Texas: How It Works

Medicaid planning refers to the legal strategies used to help you qualify for benefits without first exhausting everything you own. This often involves restructuring your estate and preparing documentation that complies with both federal and Texas-specific Medicaid laws.

Depending on your needs, your plan may involve:

• Addressing income that exceeds Medicaid limits through a Qualified Income Trust
• Converting countable resources into exempt ones, such as pre-paid funeral arrangements
• Gifting assets early enough to avoid look-back penalties
• Coordinating with a spouse to preserve income and assets when only one needs care

These are just a few examples. In many cases, a more advanced strategy is needed to protect larger assets like a home, savings, or investment accounts. One of the most effective tools for this is the Medicaid Asset Protection Trust.

Medicaid Asset Protection Trust

A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust designed to protect assets while still allowing you to qualify for Medicaid after the five-year look-back period. Once assets are placed in the trust, they are no longer counted as yours, which helps reduce your available resources. However, the trust must be created and funded well in advance to avoid penalties.

Miller Trusts and Monthly Income Limits

Texas also applies an income cap to Medicaid eligibility. If your monthly income exceeds this cap, you may still qualify by using a Miller Trust, also known as a Qualified Income Trust.

A Miller Trust allows you to redirect excess income into a separate account used only for care-related expenses. The state does not count funds in the trust toward your eligibility, which means you may still receive Medicaid even if your income is technically too high.

An elder law attorney can help set up a Miller Trust in compliance with Texas law and explain how to maintain it. For many families, this trust makes the difference between qualifying for Medicaid and paying thousands of dollars out of pocket each month.

Why Timing Matters: The Five-Year Look-Back

Texas applies a five-year look-back period to Medicaid applications. That means any gifts or transfers of assets made within five years of applying for Medicaid may be scrutinized. If the state finds you transferred property to qualify, you could be subject to a penalty period where you are ineligible for Medicaid, even if you have no money left to pay for care.

This is one reason many individuals begin Medicaid planning years before they expect to need care. Proactive planning protects more of your assets and gives you a greater range of options, from in-home support to private-pay facilities.

If you wait until a health crisis occurs, some options may no longer be available. Even so, emergency Medicaid planning is possible with guidance from an elder law attorney who focuses on these cases.

Asset Protection Tools That May Support Medicaid Eligibility

In addition to Medicaid trusts, other legal tools may support your eligibility for benefits and help protect what matters most to your family. Depending on your situation, your attorney may recommend:

• Spousal Protections: If you are married and only one spouse needs nursing home care, the other may be entitled to keep a portion of the couple’s income and assets under Medicaid’s spousal impoverishment rules.
• Exempt Resources: Some property is not counted when determining Medicaid eligibility. This includes your primary residence (up to a certain equity value), one vehicle, and personal property such as household goods, furniture, and clothing.
• Long-Term Care Insurance: While not right for everyone, a long-term care insurance policy may help cover nursing home costs if you purchased it in advance. However, these policies often come with restrictions related to age, preexisting conditions, or benefit limits.
• Durable Power of Attorney: Including a statutory durable power of attorney in your planning may allow a trusted person to manage legal and financial matters on your behalf. This can be a key part of long-term care planning in Texas.

Each of these tools can be used to support eligibility and preserve financial protection, but they must be customized based on your income, resources, and long-term goals. A Houston elder law attorney can evaluate your options and help you plan for your future while protecting your loved ones.

What About Veterans Benefits?

If you or your spouse served in the military, you may qualify for additional support. The Veterans Aid and Attendance program provides monthly payments to assist with long-term care costs, including nursing home care, assisted living, and in-home help. These benefits can be used in combination with Medicaid and are an important part of planning for many families in Houston.

Who Should Consider Asset Protection Planning?

Asset protection planning is not just for wealthy individuals. Many middle-class families in Texas own a home, have some retirement savings, and hope to leave something behind for their loved ones. Nursing home costs can quickly erode those assets.

If you fall into any of the following categories, you may benefit from meeting with a Houston asset protection attorney:

• You own a home or other real property
• You have retirement savings or life insurance policies with cash value
• You want to preserve assets for your spouse or children
• You are concerned about future long-term care costs
• You are already receiving Social Security and may need nursing home care soon
• You want to avoid placing financial burdens on your family members

Even if you think you may never need Medicaid, planning gives you options. It is easier to plan early than to respond during a crisis.

What to Expect When You Meet with an Elder Law Attorney

An elder law attorney in Houston will review your income, assets, and family goals. From there, they can create a plan that may include Medicaid trusts, powers of attorney, property transfers, and applications for available resources. The goal is to protect your financial security and make important decisions before they become urgent.

If you are married, your attorney will also consider how to protect your spouse while meeting Medicaid eligibility requirements. For clients with complex assets or unique concerns, the planning process may involve additional steps to preserve eligibility and protect long-term goals.

You can schedule a consultation to learn more and begin building a plan that fits your family’s needs and priorities.

Protect Your Assets with Support from Your Legacy Legal Care®

It takes careful planning to protect assets from nursing home costs in Houston. Whether you are still healthy or facing an immediate care need, you do not have to give up everything to pay for care. By working with an attorney who focuses on elder law and Medicaid planning, you can pursue financial protection and peace of mind for yourself and your loved ones.

At Your Legacy Legal Care®, we work with aging adults and their families throughout Houston and surrounding areas. From long-term care planning to Medicaid eligibility and asset protection, we help you make informed legal decisions that safeguard your future.

Your online search for “Medicaid planning near me” brought you here. Whether you are planning ahead or reacting to a recent diagnosis, you can take the next step today. Call (281) 218-0880(281) 218-0880 or fill out our confidential online form to schedule your strategy session.

While you wait for your strategy session, we invite you to check out our podcast, “Life Happens!”, with estate planning and elder law attorney Kim Hegwood.

We help families plan for the future, protect their loved ones, and guide them through the unexpected.

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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

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