What is the best way to transfer everything to only child to bypass probate?

A1 - for a parent to continue to own their home and go into IL, AL, NH poses challenges for both them and also for their family. And If Medicaid is applied for that adds on a whole other dimension to this. Since you are already looking at the Lady Bird Deed option to their ownership & how to deal with mineral royalty payments, you are thinking about financials BUT please realize that both of your folks will need to be BOTH medically and financially "at-need" for NH Medicaid to be eligible. For medically it means that they need skilled nursing care with the medical chart to document that need; for financials they basically are impoverished & for a couple that is abt 3200 in non-exempt assets. They are likely to need some sort of spend down & if they have a lot of $ & atty suggests a trust, the beneficiary of the trust needs to be State of Tx to be Medicaid compliant. You cannot be the beneficiary. They have to be poor to be on Medicaid.

Also I mention NH rather than AL cause Medicaid on AL is done purely on a waiver program for TX. There are 2 categories of beds for AL with only 1 being eligible for AL waiver and the # of facilities that participate is low. Waivers are not dedicated funding (which NH Medicaid beds are) so the $ could de-fund or shift after the 3 yr waiver cycle which creates uncertainty so most places don't participate. Most AL is totally private pay or 2 years + as private pay before they get a waiver bed.

It could be that just 1 of your parents need a NH and the other is ok for IL or AL and they have to instead do "community spouse" Medicaid planning. CS can be somewhat complex in & of itself.

About the Lady Bird, although it allows property to pass outside of probate so in theory no estate recovery (MERP), your parents will continue to own it till they both die. They own it NOT you. If they are on Medicaid, they are required to do a co-pay or their SOC (share of cost) to the NH each month of all their monthly income (like their SS, retirement and any other income like O&G $). All they get is a small personal needs allowance. For TX for my late mom her PNA was $ 60. That's it! so your folks will have just $ 120 a mo and realistically it just covers their beauty and barber shoppe visits and some toiletries and clothing replacement. There are things Medicaid just don't ever pay for, like dental care, so if they need that it's paid by family. Also phone & cable are not paid by Medicaid & often the PNA goes to the NH in total to pay for those 2 items alone.

Realize all property expenses - taxes, insurance, utilities, yard, repairs - will need to be paid by you from day 1 of Medicaid till beyond they die and the property transferred via LBD. MERP will still send out a NOI to you after each dies too which the atty will have to do as there is the LDB in play. WIth a LBD they continue to owe it but you gotta pay all on it as they have no $$. If your the only child, it all falls to you. You could find as they have moved out that their taxes go higher and you will need a vacant dwelling policy. IF you don't pay the taxes (due end of this month for TX), it will be placed for tax sale. Please, Please, Please put pen to paper to look at the costs on the house. Its kinda like having a second or third home & most folks cannot afford a second home much less a third but without your actual ownership so runs risk & most folks are risk adverse.

You could possible look to rent the property. A couple on this site have done that approach. It will involve FMV rental $ being added into their monthly income plus tax reporting. If their income is already close to the edge of the amount allowed by Medicaid, FMV renting probably isn't an option.

Your parents keeping their home can be done but to me, you have to be able to clearly be "all in" on this with the time, wallet and sense of humor to deal with the house for possibly years and years no matter what. Based on posts on this site, what seems to happen is that family runs out of steam within the first year and places the property on the market. Realize that if this happens, all the $ from the sale of the property is an asset that will make them Medicaid ineligible and they will need to go another round of spend-down. You cannot take any of the $ from the sale either as that would be gifting and not allowed by Medicaid.

I hope the atty you are speaking with is NAELA and in a practice with an atty who does speciality probate and they have an affiliation with a white shoe firm who does O&G or have a lot of experience with royalties. You will likely need expertise from all 3. Good luck.

A1Texas, it's great you are consulting with an attorney who focuses on elder law, but, I would suggest that you confirm that he really does know Medicaid laws. There are plenty of attorneys who do estate planning, elder care issues, etc., but, they deal with estates where there is plenty of funds to care for people the rest of their lives, assuming they don't need nursing home care, assisted living or Memory Care AL. Knowledge of these laws is very specific and unless the attorney has really studied and dealt with those laws a lot, they may not be in a position to really assist you in meeting your goal. Good luck.

Thanks so much for your answer. I have an appointment next week with an elder care atty. They currently own the property out right along with the mineral rights that also share in a larger pool. There is a steady royalty check so I'll take under consideration as well. Thanks again.

should read "to sell within the last year".

If you keep the rights, theres going to be payments received. You want to have them amortized so that you don't have month that could possible take you over the maximum income allowed under Medicaid. When I did my moms application months income may was abt $ 2,064 a mo. So if she had gotten a royalaty for say 2K, it would make her ineligible for that month. So you want it amortized over 12. The atty will know how to do this. Good luck. & btw TxRRC has all sorts of pod casts and info.

Mineral rights and really any O&G issues are pretty common for Tx Medicaid & estate planning. It's common enough that there is a line on the annual Medicaid renewal regarding payments (royalties).

That being said to me the 1st issue is:
- just what are these mineral rights - like is this an actual pumping on land involved in the Lady Bird? OR is this O&G lines running through the land (so part of a field) to be placed in the Lady Bird? OR if it's right retained even though the land was sold? if its the former your going to need to establish value and this is going to be complex……. like if its surface ownership Whatever the care you'll likely need a landman & TX RR Commission research. But if it's the other 2, it could be that the mineral rights really have very little value, like low enough that the costs to establish are way way WAY more than the value. Somehwere there is a listing of all the land and owners within the field and the % of pass through.
Could be something like 1/38 of 1/10 of field.
- Then look at what is the agreement with the production company or more even more fun in this several production companies. You may find that the rights cannot realistically be sold as the value isn't worth it. An indicator of this is if you've been contacted by an exploration co to sell within the las

Right now pass thorough royalties are paying squat. It's not unusual to get a check under $ 1.00. Look at what the checks have been, could be low. The days of shale $ are over. Theres just a lot of gas out there worldwide

I plan on talking with an Elder Care/Estate attorney but just wanted to know if mineral rights transferred along with the property when using a Lady Bird Deed. Just trying to being able to ask the right questions when we meet.

Talk with an attorney that specializes in Medicaid planning.

Could this be part of the Lady Bird Deed for the property or would it need to be totally separate?  This would be here in Texas :)

Talk to a lawyer and yes as asset transfer it will fall in Medicaid lookback.