The direct answer: Texas's Medicaid Estate Recovery Program (MERP) cannot place a lien on a home while the Medicaid recipient is alive, and it never pursues recovery at all if the estate is worth $10,000 or less, or if total long-term-care costs were under $3,000. After death, MERP can file a claim against the probate estate — but only for long-term care services received after age 55, only against property that actually passes through probate, and never if there's a surviving spouse or a child under 21. For families managing an aging parent's home, understanding exactly what MERP can and can't touch — and the legal tools that route around it entirely — matters more than the fear the acronym tends to generate.
By Zareena Samidon | Samidon Realty Group | Colleyville, TX | 8 years helping Texas families navigate senior transitions | (817) 880-0904
Last updated: August 20, 2026
What MERP Actually Is
Every state is federally required to operate a Medicaid Estate Recovery Program. In Texas, it's administered by Texas Health and Human Services (HHS), and its purpose is narrow and specific: after a Medicaid recipient who received long-term services and supports dies, the state has the right to seek reimbursement from that person's estate for what Medicaid paid.
This is not a blanket claim against everything a person owned. It's a claim against the probate estate specifically — meaning property that passes through the probate process — and it applies only to long-term care services received after the recipient turned 55. Regular Medicaid coverage for things like doctor visits or hospital stays before that point, or medical care unrelated to long-term services, is not part of MERP's recovery scope.
The Critical Distinction: No Lien While You're Alive
This is the detail that causes the most unnecessary fear, and Texas HHS states it directly: MERP does not place liens on assets before or after the death of a Medicaid recipient in the way many families assume. A common misunderstanding, often carried over from stories about other states' TEFRA lien practices, is that Medicaid can place a lien on a living recipient's home the moment they enter a nursing facility. In Texas, that's not how MERP operates — the recovery mechanism is a claim against the estate after death, filed through the probate process, not a pre-death lien.
This distinction matters enormously for planning purposes. A Texas homeowner receiving Medicaid long-term care benefits can, in most cases, keep the home in their name without an active lien being recorded against it while they're alive — which preserves flexibility for the family in ways a pre-death lien wouldn't.
Who and What Is Exempt
Texas HHS is required by federal and state law to waive or exempt MERP claims in specific circumstances. Understanding these exemptions is often more useful than understanding the recovery mechanism itself, since a large share of situations families worry about actually fall into one of these categories:
| Exemption | What It Means |
|---|---|
| Surviving spouse | If a spouse is still living, MERP will not pursue the claim — and Texas specifically does not attempt recovery even after that surviving spouse later passes away, unlike some other states |
| Child under 21 | If the Medicaid recipient has a surviving child under 21, the claim is exempted |
| Disabled or blind child of any age | A surviving child who is permanently disabled or blind exempts the claim regardless of the child's age |
| Estate under $10,000 | Texas will not pursue a MERP claim if the total value of the estate is $10,000 or less |
| Total care cost under $3,000 | If the Medicaid services provided cost less than $3,000 total, no claim is filed regardless of estate size |
| Undue hardship waiver | Heirs who can demonstrate that repayment would cause undue hardship may request HHS waive the claim even where no automatic exemption applies |
Notably, MERP claims are also classified as a "Class 7" claim under the Texas Estates Code — meaning they're paid only after several other categories of estate debts and expenses are settled first, which can further reduce or eliminate what's actually recoverable from a modest estate.
What Property MERP Can and Cannot Touch
The recovery scope is limited to the probate estate — property that passes through the formal probate process. Assets that transfer outside of probate are generally outside MERP's reach entirely:
- Life insurance policies with a named beneficiary
- Bank accounts with payable-on-death designations or joint ownership with right of survivorship
- Property held in a properly structured trust
- Property transferred via a valid Lady Bird deed or Transfer on Death Deed executed before death
That last category is why estate planning attorneys so often recommend these specific tools for homeowners anticipating or already receiving Medicaid long-term care. A Lady Bird deed (an enhanced life estate deed) lets the homeowner retain full control of the property during their lifetime — including the right to sell it — while automatically transferring ownership to a named beneficiary at death, entirely outside probate. Since May 2016, Texas HHS has also formally recognized a properly drafted and filed Transfer on Death Deed, authorized under Texas Estates Code § 114.151, as an equally valid way to route a homestead around a MERP claim.
Important caveat: these deeds must be properly drafted and filed before death to be effective, and execution details matter — Texas Bar guidance specifically notes that inexperienced caseworkers or improperly filed paperwork can complicate what should otherwise be a straightforward planning tool.
The Four-Year Statute of Limitations
Even where no automatic exemption applies, Texas law provides another layer of protection: a MERP claim can only be brought under the "administration of an estate," and estate administration in Texas is generally subject to a four-year statute of limitations from the date of death. Once that window closes without an estate being opened, attorneys have successfully argued that a MERP claim is barred entirely — because there's no longer a valid legal mechanism (an active administration) for the state to attach the claim to.
This is not a strategy to intentionally delay probate — Texas probate has its own reasons to move promptly, and heirs generally need probate completed to gain legal authority to sell or transfer the property in the first place. But it's a meaningful backstop for families where an estate genuinely wasn't opened promptly for other reasons.
How This Intersects With Selling the House
For many families, the real question behind all of this isn't abstract estate law — it's whether they can sell an aging parent's home without a MERP claim complicating the transaction. Here's how that plays out in practice:
If the parent is still living and receiving Medicaid long-term care benefits: since MERP doesn't place a pre-death lien, the home can typically be sold with the proceeds going to the parent (or their authorized representative under a valid Power of Attorney) without a MERP claim being in play yet — though the sale itself may affect ongoing Medicaid eligibility if proceeds aren't managed correctly, which is a separate consideration worth discussing with an elder law attorney before listing.
If the parent has passed away and a Lady Bird deed or Transfer on Death Deed was filed in advance: the home passes directly to the named beneficiary outside of probate, and MERP generally has no claim against it, since it never became part of the probate estate.
If the parent has passed away with no such deed in place: the home passes through probate, and if MERP has a valid claim against the estate, it typically must be resolved — often through the eventual sale of the home — before the estate can fully close and heirs receive clear title. This is where timing matters: an estate juggling a MERP claim alongside other debts sometimes benefits from the same urgency we've seen in reverse mortgage due-and-payable situations — a buyer ready to close the moment the estate has clear authority to sell prevents the process from dragging on any longer than the underlying legal work requires.
The TEFRA Lien Question: Why Texas Families Get Confused by Out-of-State Information
A significant amount of confusion around Medicaid and home liens comes from national content that doesn't distinguish between states — and the difference matters enormously if you're specifically dealing with Texas law.
Some states use what's called a TEFRA lien (named for the federal Tax Equity and Fiscal Responsibility Act that authorized it), which allows a state to place a lien on a Medicaid recipient's home while they're still alive, typically once they're deemed permanently unlikely to return home from a nursing facility. This is a real practice — but it is state-optional under federal law, and Texas does not use pre-death TEFRA liens as part of its MERP program. Texas HHS confirms directly: MERP does not place liens on assets before the death of a Medicaid recipient.
This distinction is exactly why a Texas family reading generic, national Medicaid-planning content can come away frightened by a risk that doesn't actually apply to their state. If you're researching this topic and the source doesn't specify Texas law directly, treat any claim about pre-death liens with real skepticism until you've confirmed it against Texas HHS's own published guidance or a Texas elder law attorney's advice.
What Texas does share with TEFRA-lien states: the post-death claim itself. Once the Medicaid recipient passes away, Texas MERP can and does pursue a claim against the probate estate — the mechanism is simply post-death only, not pre-death, which is the single most important distinction for planning purposes discussed throughout this guide.
A Realistic Scenario
A family inheriting a modest, cluttered estate home after a parent's passing faced both a MERP notice and a property that needed significant work before it could be sold conventionally — not unlike the situation behind our hoarder house probate case study, where the property's condition alone required a realistic, documented pricing approach rather than a traditional listing timeline. When a MERP claim or other estate debt is part of the picture, an estate benefits even more from a sale that can close quickly and cleanly once probate authority is granted — every week the estate stays open is a week additional administration costs and complexity can accumulate against a modest inheritance.
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Frequently Asked Questions About Medicaid Estate Recovery in Texas
Can Medicaid take my parents' house while they're still alive? No. Texas MERP does not place liens on a Medicaid recipient's home during their lifetime. Recovery only happens after death, through a claim filed against the probate estate — and even then, multiple exemptions may apply.
Does MERP apply to all Medicaid recipients, or just nursing home residents? MERP applies specifically to long-term services and supports received after age 55 — this includes nursing home care but can also include certain home and community-based services that help people stay in their own homes, depending on the specific program.
If my sibling and I inherit the house jointly, can MERP still file a claim? Yes, if the property passes through probate and no exemption applies (such as the estate being under $10,000), MERP can file a claim against the estate before it's distributed to heirs — the claim is against the estate itself, not against any individual heir personally.
Is a Lady Bird deed the same thing as a Transfer on Death Deed in Texas? They're similar but legally distinct instruments — both allow property to pass outside of probate to a named beneficiary while the owner retains control during their lifetime, and Texas HHS has confirmed both are effective tools for avoiding a MERP claim on the homestead when properly drafted and filed. An elder law attorney can advise which fits a specific family's situation.
What if the Medicaid recipient's estate can't pay the full MERP claim? MERP cannot collect more than the total value of the estate, and heirs are never required to pay any shortfall from their own personal funds — the claim is limited strictly to what the estate itself contains.
Can I sell my elderly parent's house before they pass away to avoid a future MERP claim? Selling while they're alive doesn't "avoid" MERP in a legally aggressive sense — since there's no pre-death lien to avoid — but it does mean the sale proceeds become the parent's asset, which has its own Medicaid eligibility implications and should be discussed with an elder law attorney before acting, since improperly handled proceeds can affect ongoing benefit eligibility.
Related Guides for Senior Living Transitions in Texas
If a reverse mortgage is also part of the estate, see our guide on reverse mortgage due-and-payable timelines for heirs. If Power of Attorney was used before a parent's passing, our guide on Power of Attorney and selling a house explains what that authority does and doesn't cover. For the full probate process, see our complete Texas probate guide.
Explore the full Senior Living resource library for more.
For informational purposes only. Not legal, tax, or financial advice. Medicaid Estate Recovery in Texas is governed by Texas Human Resources Code Chapter 32 and administered by Texas Health and Human Services. Transfer on Death Deeds are governed by Texas Estates Code § 114.151. Consult a licensed Texas elder law attorney regarding your specific situation. Zareena Samidon — Samidon Realty Group, 6407 Colleyville Blvd Suite B, Colleyville, TX 76034.