Will Property Transferred by Texas Transfer on Death Deed be Subject to Medicaid Estate Recovery?

Following the death of someone receiving Medicaid benefits, Medicaid has the power to recoup from his or her estate funds expended by Medicaid for that individual’s benefit.

Several individuals have contacted me recently wondering whether property transferred with a Texas Transfer on Death Deed is subject to the Medicaid Estate Recovery Program (MERP).

Under current rules, Medicaid can only recover assets included in the deceased individual’s probate estate. For example, homes that pass by Will through probate can be subject to MERP.

However, transfers that avoid probate are not. Therefore, the Texas Transfer on Death deed, which allows property to pass outside of probate, currently avoids estate recovery.