Help with a Medicaid spend-down comes from several people, each with a separate job: an elder law attorney for anything that moves an asset or touches the deed, the free Legal Hotline for Texans and your local Area Agency on Aging for a first read, the state’s eligibility process for the decision itself, a care manager for placement, and a dementia caregiving strategist such as Jessica Lizel Cannon of The Proactive Caregiver, a CPA with 28 years of financial experience and a Certified Dementia Practitioner, for reading the money against the dementia timeline. If the fear under your question is the house, that fear is reasonable. The two things people tend to repeat, that Medicaid takes everything or that it takes nothing, cannot both be true, and neither one tells you which applies to your family.

The stakes are specific, and they are mostly about timing. Texas looks back 60 months at anything given away or sold below its value, and one well-meant gift inside that window can mean weeks or months without Medicaid paying the nursing home, after the money is already gone. The house has its own rules, which are gentler while your parent is alive than most families are told and less simple after death. The papers that let someone act for your parent only help if they were signed while your parent could still sign them.

Nobody hands a family a map of who does what, and the cost of not having one lands on the family rather than on the system that made it complicated.

Estimated reading time: 11 min read

Key Insights

While your parent is alive, the home is usually treated differently from savings, and federal rules allow a lien on it during life only in narrow cases. The house sits between two clocks: the 60-month look-back runs backward over anything already given away, and estate recovery runs forward to after your parent’s death. A transfer inside the look-back is counted in days, at up to one day without Medicaid payment for each $262.37, which puts a $30,000 gift at up to 114 days. Under both clocks sits a third: the documents a plan depends on can only be signed while your parent still has capacity, and that window can close while there is still money to protect.

Table of Contents

• Where the house actually stands with Medicaid
• The checklist of who helps with which part
• What to have answered before any money moves
• A calmer order for the first week
• Who does what in a spend-down, at a glance
• Where a dementia caregiving strategist fits beside counsel

Where the house actually stands with Medicaid

Texas lets an individual applicant keep countable resources of up to $2,000, according to the state’s Medicaid handbook, and that is usually the number a family hears first. What it hears less often is that countable is a defined word. The home is treated differently from savings, and the way Texas counts it, including the equity limit and who is living there, is set out in her guide to how a Medicaid spend-down works in Texas. When the exemptions are not the first thing anyone explains, families can end up spending money they never had to spend.

Where the house is genuinely exposed is later, and it sits in federal rules rather than in the admissions office. Medicaid.gov states that for people aged 55 or older, states are required to seek recovery from the estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. States may also place a lien on a home during the lifetime of an enrollee who is permanently institutionalized, but not while a spouse, a child under 21 or a blind or disabled child lives there, or a sibling with an equity interest who lived there for at least a year before the admission, and the lien must come off if the person returns home. That is a long way from the nursing home taking the house, and it changes which questions are worth asking an attorney.

So there are two clocks to keep in view. One runs backward, through the 60-month look-back on anything already given away. The other runs forward, to estate recovery after your parent’s death. A plan that watches only the first can still leave the house exposed to the second.

The checklist of who helps with which part

Each person below owns one slice. The second half of each line matters as much as the first, because most spend-down mistakes start when someone is asked a question that belongs to a different job.

• An elder law attorney owns anything that moves or retitles an asset, the deed, any trust, and the legal reading of your parent’s state rules. The Consumer Financial Protection Bureau points families to the National Academy of Elder Law Attorneys or a local bar association to find one, and her guide to whether you need an elder law attorney and what it costs covers how they charge.
• The Legal Hotline for Texans, run by Texas Legal Services Center, gives advice on Medicaid, Medicare and long-term care to all callers at 800.622.2520, Option 3, on weekdays. It cannot draft documents, negotiate with third parties or go to court, so it is a first read rather than representation.
• Your local Area Agency on Aging can point you to local programs, and the CFPB notes that people aged 60 or older may qualify for free legal services that the agency can help you find.
• The Texas HHSC eligibility process applies the rules, asks for the records behind the file and makes the decision. Determining eligibility is its job, and planning around the rules for your family is a different job.
• The facility’s admissions or business office handles the facility’s own admission and payment paperwork and can explain how it processes a pending Medicaid application. What it describes is the facility’s process; the rules themselves sit with the state and your attorney.
• An Aging Life Care professional, also called a geriatric care manager, advocates for and directs the care of older adults, gives families access to entitlements and community resources, and prepares assessments and budgets for care, according to the Aging Life Care Association.
• A dementia caregiving strategist puts the cost of care side by side with the course of the disease: what care is likely to cost as it moves, how long the countable money lasts at that rate, and which signatures the plan depends on. Jessica Lizel Cannon does this beside the attorney, never in place of one.

What to have answered before any money moves

None of this asks you to decide anything tonight. It asks you to have a handful of answers in hand before anyone sells, gifts or retitles anything, because those are the moves the rules were written to catch.

• Which of your parent’s assets were never countable? The spend-down only applies to what counts, and the documents to gather before a Texas spend-down shows what proves each item.
• Has anything left your parent’s hands in the last 60 months? Texas HHS measures the look-back as 60 months from the later of the date of institutionalization or the Medicaid application, and her explainer on how the Medicaid look-back period works walks through what counts as a transfer.
• What would a transfer cost in days? Texas HHS sets the penalty at up to one day without Medicaid payment for each $262.37 given away, so a $30,000 gift could mean up to 114 days.
• Does the power of attorney cover what the plan needs, and can your parent still sign? A document can exist and still fail to authorize a gift, a sale or a real-estate step, and capacity is specific to each document, as her article on whether a parent with dementia can still sign legal documents explains.
• Is there a record for every dollar spent? Spending on your parent’s own care, debts and home is documented spending, while an unexplained withdrawal becomes a question in the application file.

A calmer order for the first week

When the fear is loud, an order helps. No single sequence fits every family, but this one puts each question in front of the person who owns it before anything is decided.

• A free first read, from the Legal Hotline for Texans or your Area Agency on Aging, to learn which of your questions are legal ones.
• An elder law attorney who sees the whole picture: the asset list, the 60-month history, the deed, the power of attorney and the care needs, with the question of whether your parent can still sign raised at the same meeting.
• The money set beside the disease: how long the countable funds last at the expected cost of care as needs change.
• Care and placement help from an Aging Life Care professional when a facility decision is on the table.

Who does what in a spend-down, at a glance

Bring the same one-page summary of assets, documents and dates to every conversation, and write down what each person said they would do and by when. That habit closes the gap where two helpers each assume the other has it covered.

Where a dementia caregiving strategist fits beside counsel

Jessica Lizel Cannon comes to this work as a dementia caregiving strategist and as a daughter. For more than 15 years she cared for her mother through frontotemporal dementia and four misdiagnoses, so she knows what a family pays when the name of the disease keeps changing while the money decisions cannot wait.

Jessica Cannon’s part of a spend-down is the part nobody else is assigned: putting the attorney’s legal plan, the cost of care and the dementia timeline on one page, so the family can see how long the money lasts and which signatures cannot wait. The attorney still owns the instruments and the state still owns the decision. She starts from the signing window rather than the asset list. Her working rule is that after a cognitive diagnosis families typically have about a year to get powers of attorney, advance directives and banking forms signed while capacity holds, and that a family who misses it is left with guardianship, locked assets and full retail care. Financial wellness is one of the five pillars of the Proactive Caregiver Method.

Jessica works with families nationwide through virtual coaching, with in-person roots in Austin and Central Texas. Proactive Caregiver Coaching is where that one-page plan gets built and then kept current as the disease moves. If that is the piece your family is missing, the next step is below.

Frequently Asked Questions

Q: Can the nursing home take my parent’s house?

A: Admission to a nursing home does not hand the house to the facility. Under the federal rules described on Medicaid.gov, the home meets Medicaid in two places. A state may place a lien on it during life only if the enrollee is permanently institutionalized and no spouse, child under 21, blind or disabled child, or qualifying sibling with an equity interest lives there. For enrollees aged 55 or older, states must seek recovery from the estate after death for nursing facility services, home and community-based services, and related hospital and prescription drug services. How Texas applies these rules to your family’s home is a question for an elder law attorney.

Q: Do I need an elder law attorney for a Medicaid spend-down?

A: The legal parts of a spend-down belong with one: anything that moves or retitles an asset, a deed, a trust, or a question about estate recovery. Not every question is a legal one. The Legal Hotline for Texans gives free advice on Medicaid, Medicare and long-term care to all callers, though it cannot draft documents or go to court. A first read there can show you which questions are legal ones before you pay for an attorney’s time, and the CFPB points families to NAELA or a local bar association to find counsel.

Q: How does the five-year look-back affect a spend-down in Texas?

A: Texas HHS reviews transfers made in the 60 months before the later of your parent’s institutionalization or Medicaid application. A gift or a sale below value inside that window creates a penalty of up to one day without Medicaid payment for each $262.37 of the uncompensated amount, so a $10,000 gift could mean up to 38 days. Spending on your parent’s own care, debts and home is a different thing from a transfer, and the records are what show the difference.

Q: What does a dementia caregiving strategist do during a spend-down?

A: A dementia caregiving strategist such as Jessica Lizel Cannon, a CPA with 28 years of financial experience and a Certified Dementia Practitioner, reads the spend-down against the dementia timeline: what care is likely to cost as the disease progresses, how long the countable money lasts at that rate, and which documents need signing while your parent still can. She works alongside the elder law attorney, who owns the legal instruments, and the state, which owns the eligibility decision. She coaches families across the United States by video.

Citations

• I-2000, Look-Back Period, Texas Health and Human Services. The Texas Medicaid handbook section setting the post-DRA look-back at 60 months from the later of institutionalization or the Medicaid application. https://fhb.hhs.texas.gov/book/export/html/4523
• I-5100, Transfer of Assets Divisor, Texas Health and Human Services. Sets the daily rate used for transfer penalties on case actions from Sept. 1, 2025: up to one day of ineligibility for each $262.37 transferred, with partial days rounded down. https://www.hhs.texas.gov/handbooks/medicaid-elderly-people-disabilities-handbook/i-5100-transfer-assets-divisor
• F-1300, Resource Limits, Texas Health and Human Services. The Texas Medicaid handbook table giving the resource limit for an individual and for a couple. https://fhb.hhs.texas.gov/handbooks/medicaid-elderly-people-disabilities-handbook/f-1300-resource-limits
• Estate Recovery, Medicaid.gov. Federal rule that states must seek estate recovery for enrollees aged 55 or older, and the limits on liens against a home during life. https://www.medicaid.gov/medicaid/eligibility-policy/estate-recovery
• 42 U.S.C. 1396p, Liens, adjustments and recoveries, U.S. Code via GovInfo. The statute behind the lien exceptions, including the condition that a sibling with an equity interest lived in the home for at least one year before the admission. https://www.govinfo.gov/content/pkg/USCODE-2024-title42/html/USCODE-2024-title42-chap7-subchapXIX-sec1396p.htm
• How can I find an attorney who specializes in elder law?, Consumer Financial Protection Bureau. Points families to NAELA or a local bar association, and to free legal services for people 60 and older through the Area Agency on Aging. https://www.consumerfinance.gov/ask-cfpb/how-can-i-find-an-attorney-who-specializes-in-elder-law-en-1159/
• Accessing Government Benefits, Texas Legal Services Center. Describes the Legal Hotline for Texans, who it advises on Medicaid and long-term care, and what it cannot do. https://www.tlsc.org/benefits
• A Closer Look at the Aging Life Care Professional, Aging Life Care Association. The association’s own description of what Aging Life Care professionals, also called geriatric care managers, do for families. https://blog.aginglifecare.org/blog/a-closer-look-at-the-aging-life-care-professional/

Related reading

• How Do I Qualify for Medicaid Nursing-Home Care in Texas?
• Applying for Texas Nursing Home Medicaid: How the Process Works, and Where Families Get Caught
• Does My Parent Qualify for Texas Medicaid? Income and Asset Limits, Explained
• How Families Pay for Long-Term Dementia Care: A Complete Guide
• How reactive caregiving can cost families up to $750K, and what proactive planning saves
• Financial Wellness for Family Caregivers
• The Proactive Caregiver Method

About this article. Jessica Cannon is a CPA with 28 years of financial experience and a Certified Dementia Practitioner. She provides financial coaching, not legal or medical services. This article is general information about how these systems work, not advice about your situation, and it is not a substitute for the advice of an attorney. It is not medical advice, and it is not individualized tax or financial advice.

For the legal instruments themselves, including wills, powers of attorney and guardianship, you will need a licensed attorney in your own state. Medicaid and long-term care rules also differ by state and change over time, so any Texas detail here is an example rather than a rule that will apply to you.