She’ll Live in Dad’s $300,000 House for a Year Before He Dies. In Texas, That Can Keep Medicaid From Claiming His Estate. She May Have Less Time Than She Thinks

Consider this scenario. A single daughter gives up her apartment and moves full-time into her father’s $300,000 Texas house. About a year later he dies, after Medicaid paid for his long-term care. When the state’s estate recovery notice comes, Texas’s own rules may already protect the house.

The protection is Texas’s exemption for an unmarried adult child who lived in the home full-time for at least a year before the Medicaid recipient died. Under 1 Tex. Admin. Code § 373.207(a)(4), Texas seeks estate recovery claims only if there is no “unmarried adult child residing continuously in the decedent’s homestead for at least one year prior to the time of the Medicaid recipient’s death.” If she fits that description, the rule bars the claim.

Why Texas Can Bill Dad’s Estate for Care After Age 55

For people age 55 or older, federal law requires states to seek repayment from the estate for nursing facility services, home and community-based services, and related hospital and prescription drug services. Texas does this through its Medicaid Estate Recovery Program (MERP), which reaches care received after age 55 by people who started those services after March 1, 2005.

Medicaid can pay for long-term nursing home care, and Texas may later seek repayment from the recipient’s estate through MERP. Texas cannot recover more than Medicaid paid for the covered services.

Texas defines the estate using the probate estate. A house that passes under Dad’s will, or to his heirs when there’s no will, falls inside it. And the program is changing hands: effective Sept. 1, 2026, MERP operations moved to Stellarware Corporation.

Over five years through 2026 Q2, the FHFA home price index rose 29.25% in San Antonio-New Braunfels and 47.99% in El Paso. Plenty of modest Texas houses now hold equity worth protecting.

One Year, Unmarried, Continuous: The Test Texas Applies

A married daughter doesn’t qualify. Weekend visits and holiday stays are unlikely to count as “residing continuously.” And the house has to be Dad’s homestead. Under Texas law, the house must be Dad’s principal residence to count as his homestead.

The rule tests only where she lives, regardless of whether she provides care. The time runs back from the date of death, so a daughter who moves in 10 months before Dad dies falls short. The full year of residence has to occur before he dies.

Texas’s estate recovery contractor sends a Notice of Intent to File a Claim within 60 days after learning of the death. That notice gives the family a chance to report exemptions before MERP decides whether to file a claim.

Medicaid is run by the states, and this exemption comes from Texas’s own administrative code. The rule lists it next to the protections for a surviving spouse, a child under 21, and a blind or disabled child. If another state paid for Dad’s care, that state’s list of exemptions applies, and it may be narrower.

Records That Prove the Year and Defeat a $300,000 Claim

Families claiming this exemption need a paper trail showing where the daughter lived. Useful records include:

• A driver’s license and voter registration showing Dad’s address
• Bank, credit card and tax documents mailed to that address
• Car registration and insurance listing the house
• Medical and pharmacy records with that address
• Dated move-in proof, such as a change-of-address confirmation or the end of her old lease

The exemption turns on residence, so heir status alone leaves the house exposed. The will sends it through probate, which is exactly where MERP’s claim applies. Texas’s hardship rules also make clear that losing an expected inheritance, by itself, does not qualify as undue hardship.

Compare the alternative, Texas’s homestead hardship waiver. It protects only the first $150,000 of the home’s tax appraisal value. Each eligible heir must have gross family income below 300% of the federal poverty level, and the request is due within 60 days of MERP’s Notice of Intent to File a Claim. On a $300,000 house, that can leave half the value exposed. The unmarried-child exemption can block recovery entirely if she meets the rule.

So before a family assumes Dad’s house will face a claim, it’s worth checking whether someone already living under his roof fits one of Texas’s exceptions. A daughter who has lived in the home for the past 12 months may already hold the strongest defense.

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