MERP And A Caretaker Child
I write for and maintain this site to combat the volumes of misinformation out there about Texas nursing home Medicaid laws and regulations. One all too common misinterpretation or misunderstanding about the law involves the Texas Medicaid Estate Recovery Program (MERP) and how it applies in the case of a child that was living with the Medicaid recipient and providing caretaking services before they entered a nursing home.
Pop Quiz
If you were a caretaker child living with your parent before they entered a nursing home and successfully applied for Medicaid benefits, will you still have a MERP problem after they pass away?
Some of you may be surprised to learn the answer in most cases is yes, you will still have a Texas MERP problem even if you meet the narrow legal requirements to qualify as a “caretaker child.”
But how is this possible?
It is simple, MERP claims are based on what assets the Medicaid recipient was the owner of record of at the time of their death. If they were still the record owner of the house at the time they passed away then you are looking at a MERP claim to recover the Medicaid benefits that the State paid out during their lifetime.
Now there are some very specific and very limited exceptions that can be used to avoid a MERP claim. As of the time of this writing, Texas only pursues MERP claims if none of the following facts exist:
- There is a surviving spouse;
- There is a surviving child or children under 21 years of age;
- There is a surviving child of any age who is blind or disabled as defined by 42 U.S.C. §1382c; or
- There is an 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.
What you do not see in that list is an exception for a caretaker child. This is right out of the Texas Administrative Code so if you think there is some phantom rule a friend of a friend of a friend told you about that protects you I urge you to get your head out of the sand and deal with the reality of the situation. If you are a married adult child that is not disabled there is no exception for you and you will have to deal with a Texas MERP claim if your parent does not take the appropriate steps while they are alive to avoid MERP.
Can You Act Now To Avoid MERP?
The Medicaid Home Protection Deed avoids all MERP claims, including in cases where there is an adult married child or anyone else that is living in the parent’s homestead. If you want to protect a homestead from MERP, consider the Medicaid Home Protection Deed.
I am a single male receiving Social Security Disability. I gave up my home in Idaho approximately 5-6 years ago to return to Texas to live with and care for my elderly father and step-mother. I am their Durable Power of Attorney and Medical POA. My step-mother went to a nursing home a few months back and I am in the process of getting my father placed there. They have both been on Medicaid for several years. She is currently approved for long term care and I will soon begin the application process for my father. When they made out the POA’s they also did a gift deed of their home to me. Their home is not paid for and I need to know if I can sell it to pay off the mortgage and their funeral plans or if I have to continue the payments myself and wait for their death to sell it. Also, will Medicaid and the nursing home receive the proceeds?
You may be able to sell the house, but the power of attorney and deed documents are going to decide the final answer. Without seeing them we can’t say but a title company might be able to.
If the proceeds are kept in their name it will be subject to Medicaid eligibility limits and potential spend-down. There may be options to avoid the spend-down that we would explore.