Irrevocable burial contract
Pre-paid funeral and burial contracts that are explicitly irrevocable are 100% exempt — no dollar cap on the contract itself.
Example. Spend $8,500 on a pre-paid contract → reduces countable assets by $8,500.
Asset planning
The spend-down planner
“Spend-down” doesn’t mean wasting money. Texas allows applicants to convert countable assets into exempt ones — legally, without an attorney for most situations.
Your current spend-down target
$0
Based on $0 in countable assets vs. the $2,000 limit.
Start with the eligibility check to calculate your exact spend-down target.
Five exempt strategies
Home repairs & mortgage paydown
The primary home is exempt. Money spent fixing the roof, paying down the mortgage, or making accessibility upgrades simply moves from a countable account to an exempt asset.
Example. Spend $6,000 on a new HVAC → countable assets drop, home value preserved.
Medicaid-compliant vehicle
One vehicle is fully exempt regardless of value. If the current car is old, upgrading is a legitimate spend-down.
Example. Trade a $1,200 car for a $15,000 reliable vehicle → $15,000 is now exempt.
Personal effects & medical needs
Wheelchairs, hearing aids, dental work, eyeglasses, and similar personal-care items are not counted.
Example. Update hearing aids ($4,000) and dental work ($3,000) before applying.
Medicaid-compliant annuity (married couples)
When one spouse stays at home, a properly structured single-premium immediate annuity can convert excess assets into an income stream for the community spouse. Requires careful drafting — review with an elder-law attorney.
Example. Convert $80,000 above the spouse's allowance into monthly income for the at-home spouse.
What you cannot do
- Gift money to children — triggers the 60-month look-back penalty.
- Transfer the house to a child for $1 — same penalty, plus a tax problem.
- Move money into a regular trust at the last minute — Medicaid sees through this.
- Hide accounts. HHSC cross-checks against state records.