Building Family Trust with Trusts
(Including the Gift of Affordable Life Planning Documents for
Your Beneficiaries)

Getting Started with a Texas Estate Plan

At Mahoney Legal of Texas, we can help you build an estate plan to fit your needs and protect your legacy. We make comprehensive and customized estate planning easier for you—and your loved ones.

Due to Tim Mahoney’s training and membership in various legal organizations, we can help you safeguard your estate for every shift in life. Your asset protection needs will change as your children grow up, marry or divorce, or sell or purchase a new property. Our Texas law firm can help you update your estate plan every three to five years to secure your assets and correctly pass your legacy on to your loved ones.

Beyond Trusts, some of your family members may be on a tight budget, unable to afford a custom plan but need to get started with estate planning due to marriage, children, business partnerships, and more. Mahoney Legal of Texas offers affordable estate planning (ALP) and essential life planning documents for all Texans, assisted by our offices in Austin, El Paso, Amarillo, Dallas, Houston, and Corpus Christi. We partner with Texas Legal to provide affordable documents, including wills, living wills, declarations for guardianship, and more. Texas Legal memberships would be an excellent gift for your beneficiaries; let them know what life planning’s all about.

MEDICAID and the Medicaid Asset Protection Trust (MAPT)

What is Medicaid?

Medicaid is a health care program that was designed to provide free or low-cost health coverage to certain categories of people, such as families with children, pregnant women, the elderly, people with disabilities, and people below certain income levels.

How does Medicaid planning work?

In Texas, such planning involves structuring your financial resources and preparing the Medicaid application documentation to ensure the best possibility of being accepted into the Medicaid program. Medicaid has certain eligibility criteria in place that one must meet in order to qualify for Medicaid benefits. In 2021, only those applicants with under $2000 in countable assets (couples are allowed $3000), and $2382 in monthly income (couples are allowed $4,764), qualify for Medicaid benefits. If you do not qualify for Medicaid benefits because the amount of your monthly income is above the monthly income limit, then you may be able to create a trust that will allow you to become income eligible for Medicaid benefits.

However, if you do not qualify for Medicaid benefits because the value of your non-exempt assets is above the asset limit, then generally, you will need to spend down your assets in order to meet the asset limit. There are certain legal planning tools that may allow you to protect your non-exempt assets from being spent for your personal and medical care. Legal planning for Medicaid is a meticulous and exacting process and should be undertaken as early as possible, particularly as part of your estate planning.

Creating the MAPT (Medicaid Asset Protection Trust); How will my finances be structured for Medicaid eligibility?

In most cases, structuring your finances involves creating trusts, managing asset transfers, and converting countable assets into exempt assets to ensure eligibility and preserve a family’s wealth.

Caution – Federal laws grant Medicaid a “look back” period - which means Medicaid officials will penalize you for making certain types of asset transfers for 60 months (5 years) prior to your Medicaid application. Penalties vary depending on the amount transferred and the average cost of nursing care in Texas. The penalty takes the form of a delay in Medicaid benefits until you have spent the value of the asset transferred on your care. This is why it is critical to seek legal advice before transferring assets to third parties. This process can be especially useful for middle-class families who might have all the family assets consumed by nursing home care.