Will the State Take the House? Texas Medicaid Estate Recovery and the Dallas Family Homestead

By Dallas Senior Advisor Care Team · September 20, 2026

What Texas Medicaid estate recovery is — and when a Dallas family actually faces it

Almost every family that finally applies for Medicaid long-term care asks the same question within about ninety seconds: will the state take the house? The Texas Medicaid Estate Recovery Program — MERP, run by the Texas Health and Human Services Commission — is the reason the question exists, and it is the single most misunderstood piece of the long-term care conversation in Dallas–Fort Worth. Federal law has required states to attempt recovery since 1993; Texas implemented its version relatively late, and only applies it to people who applied for and received covered long-term care services on or after March 1, 2005, and who were age 55 or older at the time those services were provided. A parent who entered a nursing facility in Garland in 2003 and never reapplied is outside the program entirely. A parent who started STAR+PLUS HCBS waiver services in Mesquite last year, at 79, is inside it.

The second thing to understand is what gets counted. MERP is not a lien placed on the home while your mother is alive, and it is not a bill the family personally owes. It is a claim filed against her estate after death, for the amount Texas Medicaid paid on her behalf for covered long-term care — nursing facility care, intermediate care facility services, certain hospital and prescription costs incurred while receiving those services, and community-based waiver services including the STAR+PLUS Home and Community Based Services waiver. That last item surprises people. Families in Plano and Richardson often assume the waiver is the safe route because it keeps a parent out of a nursing home. It keeps them out of a nursing home. It does not keep the account outside MERP.

The rule that makes Texas different: probate estate only

Federal law lets states go further than Texas chooses to go. States are permitted to expand the definition of estate to reach assets that pass outside probate — joint tenancy property, life estates, living trusts, payable-on-death accounts. Texas has never taken that option. The Texas Medicaid Estate Recovery Program reaches only the probate estate: property that passes under a will or under the Texas rules of intestate succession through a probate court. Anything that legally transfers outside probate is, as a practical matter, outside MERP's reach in Texas. This is not a loophole somebody discovered; it is the design of the Texas program, set out in Texas Human Resources Code section 32.0212 and the HHSC rules at 1 Texas Administrative Code Chapter 373.

That single distinction does more work than every other exemption combined. It is why a Texas Transfer on Death Deed — authorized by the Texas Estates Code since 2015, revocable at any time during the owner's lifetime, and effective only at death — has become the standard tool discussed in elder law offices from Uptown to Flower Mound. A homestead that passes by a properly recorded Transfer on Death Deed never enters the probate estate. The same logic applies to survivorship accounts and to property already held in certain trusts. None of this is do-it-yourself territory: a deed recorded incorrectly, recorded too late, or recorded in a way that constitutes an uncompensated transfer can create a Medicaid eligibility penalty far worse than the recovery claim it was meant to avoid. The point is not that Texas families can outrun MERP. It is that Texas law leaves ordinary, lawful estate planning intact in a way many other states do not.

The exemptions and waivers that stop a claim before it starts

Before any of that comes into play, Texas rules out recovery altogether in several situations. HHSC will not pursue a claim if the Medicaid recipient is survived by a spouse; by a child under 21; by a child of any age who is blind or has a disability; or by an unmarried adult child who lived in the decedent's homestead continuously for at least one year immediately before the death. That last category — the caretaker child — matters enormously in DFW, where it is common for one adult child to move back into a Lake Highlands or Oak Cliff house to keep a parent at home for as long as possible. Families who do exactly that and never document it are the ones who get caught out later. Keep utility bills, mail, voter registration, and a driver's license at that address.

Texas also declines small claims. HHSC does not file against an estate valued at $10,000 or less, does not pursue a recovery amount of $3,000 or less, and does not proceed when the cost of recovery would exceed what could be recovered. Separately, an estate representative may request an undue hardship waiver. The recognized Texas grounds include an estate that is the sole income-producing asset of the survivors — the family farm, ranch, or small business — a homestead of modest value, heirs who would themselves become eligible for public assistance if recovery proceeded, and an heir who provided care that allowed the recipient to delay entering a facility. Heirs may also deduct documented amounts they personally paid for the home's upkeep, taxes, and insurance, and for care that kept the recipient out of an institution. Every one of these requires a written request within the deadline HHSC sets, with proof attached.

Why rising Dallas and Collin County home values quietly change the math

The modest-homestead hardship waiver is defined relative to the average home value in the county where the homestead sits — and that is where DFW stops resembling the rest of Texas. A 1960s ranch house in Pleasant Grove and a comparable house in Frisco are not remotely comparable in dollars, and they are not measured against the same county benchmark either. Dallas County, Collin County, Denton County, Tarrant County, and Rockwall County each carry their own average, and those averages have moved a long way in a decade. A family whose parent bought in Richardson or Carrollton in 1978 may find the house now sits well above the county benchmark, which can close the modest-homestead door, while an identically situated family in a lower-priced part of Dallas County still walks through it. Nobody plans for this, because the house was never treated as an asset — it was just the house.

The practical consequence is that the conversation has to happen earlier in DFW than families expect. Probate in this metro runs through the Dallas County probate courts, the Collin County probate court, Denton County, Tarrant County, and Rockwall County — and an estate representative only has a short window to respond to an HHSC Notice of Intent to File a Claim, which is generally issued within 30 days of HHSC learning of the death. The response window that follows is measured in weeks, not months. A Dallas family that first hears the phrase Medicaid estate recovery while also arranging a funeral is a family making decisions under the worst possible conditions. The households that come out of this cleanly are almost always the ones that asked the question at the time of the Medicaid application, not at the time of the death.

What to do now, and who in DFW to ask

Start with the paperwork you already have. Find out the exact date the parent first applied for Medicaid long-term care and what program paid — STAR+PLUS HCBS waiver, nursing facility care, or something else. Find out whether the homestead is currently titled in the parent's name alone. Establish whether any of the categorical exemptions apply: a surviving spouse, a disabled adult child, a caretaker child with a documented year of residence. Those three facts determine most of the outcome. Note also what MERP does not cover: it applies to long-term care services, not to routine Medicare cost-sharing paid through the Medicare Savings Programs, and it is not a claim against the family's own money.

Then get real advice. This is an area where an elder law attorney licensed in Texas earns their fee several times over, and where generic advice found online — much of it written for states that recover far more aggressively than Texas does — will actively mislead you. For free or low-cost help, Dallas County families can reach the Dallas Area Agency on Aging, operated by The Senior Source, which also runs an elder financial safety program in partnership with the county. Legal Aid of NorthWest Texas serves income-qualifying residents across Dallas and Tarrant counties. Families in Collin, Denton, and Rockwall counties can contact the Area Agency on Aging of North Central Texas, and anyone in the metro can dial Texas 2-1-1 for the HHSC Aging and Disability Resource Center. Ask about MERP by name — it is a specific program with specific forms, and the person on the phone will know exactly what you mean.

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Common questions

Will the Texas Medicaid Estate Recovery Program take my mother's house in Dallas after she dies?

Not automatically, and in many Dallas cases not at all. MERP files a claim against the probate estate for long-term care Texas Medicaid paid on her behalf, for services received at age 55 or older on or after March 1, 2005. HHSC will not pursue recovery if she is survived by a spouse, a child under 21, a child of any age who is blind or has a disability, or an unmarried adult child who lived in the homestead continuously for at least the year before her death. Texas also skips estates valued at $10,000 or less and claims of $3,000 or less. Beyond that, undue hardship waivers and heir-paid expense deductions can reduce or eliminate what is collected.

Does the STAR+PLUS HCBS waiver trigger Texas Medicaid estate recovery the same way a nursing home does?

Yes. This is the point families most often get wrong. Texas counts community-based waiver services, including STAR+PLUS Home and Community Based Services, among the covered long-term care services subject to recovery, alongside nursing facility care and intermediate care facility services. Choosing the waiver so a parent can stay in an assisted living community in Plano or receive attendant care at home in Garland is frequently the right care decision, and it does not exempt the estate from MERP. Treat the waiver application and the estate planning conversation as the same conversation, held at the same time, rather than assuming that staying out of a nursing home also keeps the house out of reach.

How much time does a Dallas family have to respond to an HHSC estate recovery notice?

Very little, which is why it catches people. HHSC generally issues a Notice of Intent to File a Claim to the estate representative within 30 days of learning of the death, and the representative is then expected to return the required acknowledgement form and any hardship waiver request or deduction documentation within the short window stated in that notice — weeks, not months. Missing it does not automatically forfeit every argument, but it makes an already difficult process harder and it is happening while the family is also dealing with a funeral and a Dallas, Collin, Denton, Tarrant, or Rockwall County probate filing. Open the envelope immediately and call an elder law attorney the same week.

Can a Transfer on Death Deed keep a DFW homestead out of Medicaid estate recovery?

In Texas it can, because Texas recovers only from the probate estate and a properly executed, properly recorded Transfer on Death Deed passes the homestead outside probate at death. It is revocable during the owner's lifetime and, because it transfers nothing until death, it is not treated as a gift for Medicaid eligibility purposes. That said, this is exactly the kind of document that fails on technicalities — wrong recording county, recorded after death, conflicting language in a will, or a signature obtained when capacity was already in question. It also does not solve every situation, particularly where there is a mortgage or multiple heirs. Have a Texas elder law attorney prepare and record it; do not download a form.