How to Avoid the Medicaid Estate Recovery Program (MERP) in Texas
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If you’re planning for long-term care or helping a loved one through the estate process, there’s one four-letter acronym that often raises concern: MERP, short for the Medicaid Estate Recovery Program. Whether you're buying or selling a home or doing elder care planning, understanding MERP is essential to protecting your family's assets.
What Is Medicaid Estate Recovery Program (MERP) in Texas?
The Texas Medicaid Estate Recovery Program is the state’s way of reclaiming the cost of Medicaid benefits paid to individuals after they pass away. It’s not unique to Texas—federal law requires every state to have such a program—but how Texas applies it offers both challenges and opportunities for families who plan ahead.
After a Medicaid recipient dies, the state may place a MERP lien against their estate. This lien is the government’s legal claim to be reimbursed for Medicaid expenses such as nursing home care, hospital stays, or long-term support services.
When Does Medicaid Estate Recovery Program (MERP) Apply?
MERP only applies to assets that pass through probate—in other words, property that goes through the court-supervised estate administration process. As of 2018, non-probate assets are not subject to MERP recovery in Texas.
What Assets Are Safe from Medicaid Estate Recovery Program (MERP)?
Several types of property avoid the MERP lien entirely because they don’t go through the probate estate. These include:
Assets held in a Living Trust
Real estate transferred via a Transfer on Death Deed (TODD)
Properties passed through an Enhanced Life Estate Deed (also known as a Lady Bird Deed)
Vehicles with beneficiary designations (via Form VTR-121)
Bank accounts with Payable-on-Death (POD) or Transfer-on-Death (TOD) designations
Life insurance and retirement accounts with named beneficiaries
Because these assets pass directly to beneficiaries outside of probate, the state of Texas cannot place a MERP lien on them.
What Should You Do If You Receive a Medicaid Estate Recovery Program (MERP) Notice?
If you receive a Notice of Intent to File a Claim under MERP, timing is critical. You typically have 60 days to respond and file for a hardship waiver or an exemption. Failing to act within that time can lead to the state successfully claiming property that might otherwise be protected.
Working with an experienced elder law attorney is essential during this stage. An attorney can help you:
Respond properly to MERP notices
Assert exemptions
Structure your estate plan to avoid MERP before it becomes an issue
Planning Ahead: Why It Matters
Avoiding MERP is a central reason many families in Texas choose to work with an estate planning attorney. Much of the strategic planning—such as creating trusts, updating beneficiary designations, or filing TODDs—is done years before Medicaid is ever needed.
Final Thoughts
MERP doesn't have to be a threat to your legacy. By understanding how the Texas Medicaid Estate Recovery Program works—and how to avoid it—you can protect your home and assets for the next generation.
If you're unsure how your estate is structured or whether your current plan puts your family at risk, now is the time to review it with a trusted estate planning attorney.
Need help avoiding MERP? WG Law helps Texas families protect their assets and plan for the future with confidence. Schedule your consultation today.
