The Bad news. This is happening a lot. People with no assets other than their home apply for medicaid to cover nursing home care. Medicaid fronts the money with the idea that the person might return home some day. The caveat is that if they die, medicaid will try to recover from the estate, in most cases by levying against the house. That is why the house is an exempt asset for purposes of medicaid eligibility. This is also why medicaid has a lookback period (5 years now) for asset transfers for people who try to gift their house to others as a means of protecting it prior to nursing care.
The Really Bad News. Medicaid can go back and collect from the estate and void transfers from the estate deemed fraudlent and this would be one of them. I am not saying that you intended to commit a fraud, just that medicaid wants the asset and views any transfer that defeats their interest as a fraud. On March 1, 2005, Texas implemented the Medicaid Estate Recovery Program in compliance with federal Medicaid laws. They can try to get the $31K and since your husband was the executor, he's on the hook.
The Good News. You may be able to file a hardship waiver. Although you don't appear to meet most of the conditions for such a waiver, one provision is for "other compelling reasons".
I would suggest you engage an attorney at once and bill your relatives in 25% shares. Kicking in a little bit to batte this is better than a clawback suit down the road that strips it all away.
As FYI, here is the Texas info page: