We can’t tell you how Texas applies the Medicaid rules, but it would be surprising if the state took your father-in-law’s wife’s assets into account when looking at his Medicaid eligibility. You should be able to explain the circumstances and clarify that they live separately. The state may or may not want some proof of the situation. And they may or may not want your father-in-law to sign over to them any rights he may have to spousal support. So these may be hoops you’ll have to jump through, but they shouldn’t ultimately affect his eligibility for benefits. A Texas elder law attorney could give you more definite advice about local practices. To find an attorney in Texas, go here: http://www.elderlawanswers.com/texas-elder-law-attorneys.
For more about Medicaid's rules, click here.