Medicaid Spend-Down in Dallas, Texas (2026)

Where a Dallas Application Goes, and Who Else to Call

Texas does not administer Medicaid eligibility through counties, so families searching for a Dallas County Medicaid office will not find one. Apply through YourTexasBenefits online, by phone, by mail, or in person at an HHSC benefits office; Dallas has several eligibility offices. Ask specifically for the long-term-care track, which is handled by Medicaid for the Elderly and People with Disabilities staff rather than by general eligibility workers.

The Dallas Area Agency on Aging is the Area Agency on Aging for Dallas County, and in an arrangement unusual among large metros it is administered by the nonprofit The Senior Source. It provides free benefits counseling, care options counseling, caregiver support, and long-term care ombudsman services. Texas’s State Health Insurance Assistance Program is the Health Information, Counseling and Advocacy Program, HICAP, delivered through area agencies on aging. These counselors are free and sell nothing.

For anything touching a life insurance contract or a settlement participant’s license, the regulator is the Texas Department of Insurance. Read the general spend-down framework alongside this page, but the Texas specifics below are what change the outcome.

Community Property Does Not Shield Half Your Assets

Texas is a community property state. Property acquired during a marriage is generally owned equally by both spouses, whatever the title says. That is real Texas law and it governs a great deal — divorce, probate, creditor questions, the characterization of an inheritance.

It does not govern Medicaid eligibility, and the reason is explicit in federal law: the spousal impoverishment rules count the couple’s resources notwithstanding state community property law. On the snapshot date, HHSC totals all countable resources of both spouses, in both names and in either name alone. There is no half that is invisible because it is legally hers.

Two versions of the myth do particular damage in Dallas. The first is “the account is only in my name, so it is not his.” On a Medicaid application that distinction does not exist. The second is “we can partition our community property so half becomes her separate property.” A partition agreement is a real Texas instrument with real effects, but executing one to move assets out of reach shortly before applying is a transfer, reviewable inside the 60-month look-back, and it produces a penalty rather than protection. Discuss any partition with a Texas elder law attorney before, not after.

What the couple actually gets is the federal protection, which is generous but bounded — and which is described in the section on what she keeps below.

Where Texas Property Law Does Matter

Having said what community property does not do, it is worth being precise about where Texas law genuinely helps, because families sometimes over-correct and assume none of it counts.

Characterization of separate property. Assets a spouse owned before marriage, or received by gift or inheritance during it, are separate property under Texas law. That characterization matters at death and in the eventual estate, even though it does not remove the asset from the Medicaid snapshot during life.

The Texas homestead. Texas protects the homestead from most creditors without a dollar cap, subject to acreage limits. For Medicaid purposes a separate federal home equity ceiling still applies to eligibility — the two rules do different jobs, and a Dallas family should not assume the state protection answers the federal question.

Deeds and title tools. Texas recognizes both transfer on death deeds and enhanced life estate deeds — the latter often called a lady bird deed — and both are used in Texas estate and long-term-care planning. Whether either is appropriate depends entirely on the family’s facts, and executing the wrong one at the wrong time can create a transfer penalty. This is legal work, and it belongs with a Texas attorney rather than a form service.

Estate recovery. Texas operates a Medicaid Estate Recovery Program that generally applies to people who received covered long-term-care services at or after age 55, with a set of exemptions and undue-hardship waivers. It does not pursue recovery while a spouse survives.

What the Spouse at Home Keeps, and What She Lives On

Resources. On the first day of a continuous institutional stay of at least thirty days — the snapshot date — the couple’s combined countable resources are totalled. The community spouse retains a share, generally half, subject to a federal floor and ceiling adjusted annually: as of 2026 roughly $31,500 to $33,000 at the bottom and roughly $157,000 to $162,000 at the top. Confirm both current figures with HHSC. Moving money between spouses after the snapshot does not change the snapshot, and the snapshot can be taken retroactively.

Income. Her own income is generally not counted toward his eligibility — Texas follows the name on the check. If her income falls below the Minimum Monthly Maintenance Needs Allowance, part of his income is diverted to her before anything goes to the facility. As of 2026 the floor sits in the neighborhood of $2,550 to $2,700 a month and the maximum near $3,950 to $4,100. An excess shelter allowance can raise the floor where housing costs are high relative to income.

The income cap. Texas is an income-cap state. If the applicant’s gross monthly income exceeds the cap, eligibility generally requires a Qualified Income Trust — a Miller trust in Texas practice — established and funded before the month coverage should begin, with income actually flowing through it each month. Texas attorneys set these up routinely. Ask HHSC whether your income triggers it and have a Texas attorney draft it; a downloaded template produces denied months.

What Dallas Families Believe	What HHSC Actually Applies (2026)
“Texas is community property, so half is hers and Medicaid can’t touch it.”	Federal spousal rules count both spouses’ countable resources notwithstanding state community property law.
“The account is only in my name, so it isn’t his.”	Title does not matter on the snapshot; both names and either name alone are counted.
“We’ll sign a partition agreement before applying.”	A partition executed to move assets out of reach is a transfer inside the 60-month look-back.
“The Texas homestead has no value cap, so the house is safe.”	A separate federal home equity ceiling applies to Medicaid eligibility; the two rules do different jobs.
“Our income is modest, so the income cap won’t apply.”	It is a gross-income test; Social Security plus a pension can clear it. A Miller trust may be required.
“Medicaid will take the house from my widow.”	Texas estate recovery does not pursue recovery while a spouse survives, and has defined exemptions.
“A small burial policy doesn’t count.”	Once total face value of cash-value policies exceeds $1,500, the entire cash surrender value counts.

Texas Property Taxes and the Over-65 Freeze

Texas has no state income tax and among the highest property tax rates in the country, which puts an unusual share of a Dallas widow’s fixed costs into one annual bill. This is worth handling deliberately, because it is one of the few levers a family here can pull without a lawyer.

Texas provides an additional homestead exemption for homeowners aged 65 and over, along with a ceiling on school district taxes for those homeowners, and a tax deferral option that postpones payment — with interest, and it is a postponement rather than forgiveness. The general homestead exemption amount and the over-65 provisions have been changed repeatedly in recent legislative sessions, so confirm the current figures and application deadlines with the Dallas Central Appraisal District rather than relying on a number from an older article.

Two practical points for a spousal case. First, if the couple never filed for the over-65 exemption because one of them was still under 65, check now — it is not automatic in every situation. Second, the documented property tax bill feeds directly into the excess shelter allowance calculation described above, so lowering the bill and documenting the bill are both worth doing, in that order.

What Care Costs in Dallas Versus the Texas Median

Working from the most recent published cost-of-care survey data as of 2026 and stating these as ranges rather than quotes:

• Skilled nursing, semi-private, Dallas and the Dallas-Fort Worth metro: roughly $5,600 to $6,800 per month.
• Skilled nursing, semi-private, Texas median: roughly $5,500 to $6,500 per month.
• Assisted living, Dallas metro: roughly $4,800 to $5,600 per month.
• Assisted living, Texas median: roughly $4,500 to $5,200 per month.

Texas is one of the least expensive skilled nursing markets in the country and Dallas sits only slightly above the state figure — a Dallas family’s monthly bill is roughly half what a Nassau County or Snohomish County family faces. That is genuine relief, and it lengthens the runway that a given pool of savings buys.

The complication is internal to the county. Dallas County contains one of the widest ranges of residential values of any large county in the United States, from the southern sector to the Park Cities corridor, and the community spouse’s position depends far more on which Dallas she lives in than on the county average. A widow in a paid-off house in one part of the county and a widow in a paid-off house six miles away can be looking at property tax bills that differ by a factor of five, with identical care costs. Run your own numbers rather than the county’s. See nursing home costs in Dallas for more local pricing.

The Life Insurance Policy and the Survivor

Life insurance is a resource, evaluated under an aggregation rule: HHSC totals the face value of all cash-value policies on the insured’s life, and if that total exceeds $1,500, the entire cash surrender value becomes countable — inside the snapshot pool and against the applicant’s $2,000 limit. Term insurance with no cash value has nothing to surrender and generally nothing to count, though convertible term can still carry market value.

For a married couple the framing question is what the death benefit does for her. In Texas that answer is often specific: it is the money that pays a property tax bill she can no longer defer, or that lets her keep a homestead she is entitled to stay in but cannot otherwise afford.

The options in the order a couple should weigh them:

• A reduced paid-up election — stop premiums, keep a smaller guaranteed death benefit for her, and cut the countable cash value. Frequently the best trade for a couple; compare it at reduced paid-up versus a settlement.
• An irrevocable prepaid funeral contract for each spouse — generally an excluded resource and a clean use of excess funds.
• Surrender for cash value — immediate cash at the lowest of the available figures, and the coverage ends permanently.
• A life settlement — sale to a licensed institutional buyer, appropriate only where the survivor genuinely does not need the benefit. The tax treatment of proceeds is a separate analysis; start at the Texas tax picture and take it to your own CPA.

Read how life insurance counts as a Medicaid asset for the resource mechanics, and check the beneficiary designation while you have the file open.

When Selling Is Wrong, and What to Do This Week

Selling the policy is the wrong answer when the community spouse will need the death benefit — the first and heaviest test. It is wrong when the face amount is under roughly $100,000, because institutional buyers generally will not bid at that size. It is wrong when the policy already sits inside a burial exclusion or has been irrevocably assigned to a funeral contract. It is wrong when the insured is in good health for their age, because settlement pricing turns almost entirely on projected life expectancy. And it is wrong to sell and then move the proceeds to a child or into a partition agreement — both are transfers inside the 60-month look-back, as the look-back rules on selling a policy explain.

This week, in order: identify the snapshot date and pull statements for every account in either name from that month; stop all transfers and do not execute a partition or a deed without legal advice; check the Dallas Central Appraisal District record for the over-65 homestead exemption and school-tax ceiling; gather the property tax bill, insurance, and utility bills for the excess shelter allowance; ask HHSC in writing for the current resource limit, the CSRA figures, the MMMNA, and whether a Miller trust is required; list every life insurance policy on both spouses with declarations page, current cash surrender value statement, and rider schedule; call the Dallas Area Agency on Aging at The Senior Source for free counseling; then retain a Texas elder law attorney before anything moves.

If a policy is part of the picture and you want to know what it is worth before deciding, send the policy cover page for a free, no-obligation review or call (305) 209-7183. If the right answer is to keep it for the survivor, you will be told that. Pine Lake Life Solutions provides educational information only and does not provide legal, tax, or Medicaid-eligibility advice.

---

Frequently Asked Questions

Does Texas community property law protect half our assets from Medicaid?

No. Federal spousal impoverishment rules count the couple’s countable resources notwithstanding state community property law, so on the snapshot date HHSC totals everything in both names and in either name alone. Community property still governs characterization, probate, and creditor questions, but it does not create a half that is invisible to a Medicaid application.

Which office handles a long-term-care Medicaid application in Dallas?

The Texas Health and Human Services Commission. Texas does not decide eligibility at the county level, so there is no Dallas County Medicaid office. Apply through YourTexasBenefits online, by phone, by mail, or at an HHSC benefits office in Dallas, and ask specifically for the Medicaid for the Elderly and People with Disabilities track.

Can we sign a partition agreement to protect my wife’s share?

A partition agreement is a real Texas instrument, but executing one to move assets out of reach shortly before applying is a transfer reviewable inside the 60-month look-back, and it produces a penalty rather than protection. If a partition is being considered for any reason, take it to a Texas elder law attorney before signing, not afterward.

How much can the spouse at home keep in Texas?

Generally half of the couple’s combined countable resources on the snapshot date, subject to a federal floor and ceiling — in the neighborhood of $31,500 to $33,000 and $157,000 to $162,000 as of 2026. The homestead is generally excluded while she lives in it, subject to a federal equity ceiling. Confirm the current figures with HHSC.

Do we need a Miller trust in Texas?

You do if the applicant’s gross monthly income exceeds the long-term-care income cap, which is common for retirees with Social Security plus a pension. The Qualified Income Trust must be established and funded before the month coverage should begin, with income actually flowing through it. Ask HHSC whether the cap applies, then have a Texas attorney draft it.

What property tax relief is available to my wife in Dallas?

Texas provides an additional homestead exemption for homeowners aged 65 and over, a ceiling on school district taxes for those homeowners, and a deferral option that postpones payment with interest rather than forgiving it. Amounts have changed repeatedly in recent sessions, so confirm current figures and deadlines with the Dallas Central Appraisal District.

Should we cash in a life insurance policy to spend down?

Consider what the death benefit does for the survivor first. In Dallas that is often the money that covers a property tax bill she can no longer defer or lets her stay in a homestead she cannot otherwise afford. A reduced paid-up election frequently cuts the countable cash value while preserving some coverage. Get the numbers before surrendering.

Related Reading

• Nursing Home Costs Dallas Tx
• Life Settlements Dallas Tx
• Texas Medicaid Asset Income Limits
• Life Settlement Taxes Texas
• Sell Life Insurance Policy Bell County Tx
• Nursing Home Medicaid Spend Down
• Life Insurance Counts Medicaid Asset
• Medicaid Lookback Selling Policy
• Reduced Paid Up Vs Settlement

---

Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.