Many people have worked long and hard to pay for their home. They do not want to leave it, the place of so many memories. They worry that if they must go to a nursing home, their own home will be forfeit.
Your home and Texas Medicaid
In Texas this need not happen. In Texas Medicaid does not put a lien on your home. In Texas your home is not counted as an asset in determining financial eligibility for Medicaid. It remains your home as long as you intend to return to it someday.
After you and your spouse have passed, Texas Medicaid might try to recoup the “loan” it gave for your care. But it will not do so if you leave a minor child or a disabled adult child or a child who moved in to care for you for at least a year. It will not do so if you have a sibling who has an ownership interest in the house. It will not do so if the cost of recovery is too high or the amount it can expect to recover is too low. It will not do so if doing so would impose an undue hardship on your heirs (or, if it would only impose an undue hardship on some of your heirs, it will not do so to the extent of their inheritance.)
In Texas Medicaid can only recover from your probate estate. Bank accounts which are held joint with right of survivorship (“JTROS”) or pay on death (“POD”) are not part of your probate estate. Life insurance, 401(k)s, IRAs and other brokerage accounts on which you have named a beneficiary are not part of your probate estate.
Your home and your probate estate
You can also remove your home from your probate estate. For years elder law and estate planning attorneys have used what is commonly called a Lady Bird Deed to automatically transfer property on death. The home remains your property until then. The deed can be revoked. A Lady Bird Deed is still the only way to transfer property on death using a power of attorney. Now, although it is not yet accepted by all title insurance companies, Texas also has a Transfer on Death Deed. Forms and forms for revocation and for an affidavit to transfer the title after death are available at www.texaslawhelp.org.
Terry Garrett is a member of the National Academy of Elder Law Attorneys and is active in the Texas and Austin Bar Associations. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.
She assists families of people with special needs, people planning for the retirement years and people administering estates.