He Will Never Go Home Again, and the Caseworker Will Know It. Fine Print on the Application Will Keep His $500,000 House Off the Spend-Down Anyway

Picture a widower in Texas who had a stroke and now lives in a care facility. His doctors tell the family he’s extremely unlikely to go home again. So his kids do the math everyone does. Dad’s paid-off house, worth $500,000, must now count against him, and Medicaid will make him burn through it before paying anything.

They’ve missed the fine print: “I intend to return home.” Texas Medicaid uses the same basic intent-to-return rule found in federal Supplemental Security Income (SSI) policy. If Dad genuinely intends to go home if he’s able, his physical condition doesn’t override that statement. Even a grim prognosis doesn’t automatically make the house countable.

How One Statement Keeps a $500,000 House Out of the Spend-Down

Federal SSI rules generally keep a former home out of the resource count when the owner intends to return. Medicaid adds another test for long-term care, however: the home’s equity still has to stay below the state’s home-equity limit.

Texas uses the same basic approach. Intent can be documented on Form H1245, Statement of Intent to Return Home, or through a comparable written statement. If Dad can’t handle the paperwork himself, an authorized representative can provide the statement for him.

A forecast predicts what will probably happen. Intent describes what he wants to happen if his body allows. A man can hear terrible odds and still plan to sleep in his own bed again, and the form records that plan.

Same $500,000 House, Two Very Different Applications

Here’s Dad’s application run through both ways:

No intent to return. If Dad says he doesn’t intend to go home, the house loses this exclusion. Texas generally limits his other countable resources to $2,000, so $500,000 of countable home equity would put him far over the line. The 2025 CareScout survey puts the national median for a semi-private nursing home room at $9,581 a month. At that rate, $500,000 equals roughly 52 months of care.

Intent stated. The house stays out of the resource count. Texas still imposes a home-equity limit of $752,000 in 2026. Dad’s $500,000 sits comfortably below it, so the house itself doesn’t prevent him from qualifying once he meets the other Medicaid requirements.

The statement has to be true. If Dad says he wants the house sold and also says he intends to return to it, those two answers don’t fit together. And if he later changes his mind and no longer intends to return, the house can lose the exclusion.

Rules vary by state. In 2026, home-equity limits run from $752,000 to $1.13 million. A house above Texas’s $752,000 limit could still pass in a state with a higher cap, but Dad’s statement of intent won’t rescue a house that exceeds the applicable equity limit.

Estate Recovery Can Still Claim the House After Death

The exclusion protects Dad’s eligibility while he’s alive. His death raises a separate problem. Texas has run its Medicaid Estate Recovery Program (MERP) since March 2005. It can file a claim against the estate of a recipient who was 55 or older when he received ongoing care services.

Texas won’t pursue recovery while a spouse is still alive, and it also protects certain children, including those under 21 and those who are blind or permanently disabled. The state also passes over estates worth $15,000 or less and Medicaid claims of $5,000 or less, and families can ask for hardship relief. Dad’s a widower, so the spouse protection doesn’t help him.

Texas families sometimes use an enhanced life estate deed, better known as a Lady Bird deed, or a transfer on death deed. Properly done, either can keep the house out of probate, which can also keep it outside Texas estate recovery under current law. One important catch: an agent acting under power of attorney can’t create a transfer on death deed, so Dad’s capacity and timing matter.

The house can stay exempt even when Dad’s doctors and kids think the nursing home stay will be permanent. What matters is whether Dad genuinely intends to return if he can. One declaration can protect his eligibility, while separate estate planning can determine what happens to the house after he dies. (The deed is one line on a longer checklist of beneficiary forms, ownership changes and trust decisions we pulled together in a free estate guide here.)

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