This page provides a plain-English summary of key elder care and estate planning information specific to Alabama residents. It covers Alabama Medicaid limits, estate tax rules, advance directive information, and links to important Alabama agencies and resources.
Information on this page is updated periodically but laws and limits change frequently. Always verify current figures with the relevant agency or a licensed attorney.
Alabama Medicaid — 2026 Eligibility Limits for Long Term Care
Alabama’s Medicaid program is administered by the Alabama Medicaid Agency. Alabama has not expanded Medicaid under the Affordable Care Act meaning most healthy adults aged 19 to 64 without disabilities or dependent children do not qualify for standard Medicaid coverage. Coverage focuses on children pregnant women seniors aged 65 and older and people with disabilities.
Income limit — single applicant The income limit for a single nursing home Medicaid applicant is $2,982 per month in 2026. Alabama is an income cap state meaning applicants whose income exceeds this limit must establish a Qualified Income Trust — also called a Miller Trust or QIT — to qualify.
Asset limit — single applicant A single applicant must have $2,000 or less in countable assets. Exempt assets include the primary residence with equity up to $1,130,000 — Alabama uses the federal maximum home equity limit — if the applicant intends to return home, one vehicle, personal belongings and household furnishings, and irrevocable burial trusts. Note that IRAs and retirement accounts are counted as countable assets in Alabama.
Home and community based care — HCBS Waivers Alabama offers HCBS Waiver programs providing home and community based services for people who need nursing facility level care but want to remain at home. The primary program for seniors is the Elderly and Disabled Waiver. The asset limit is $2,000 for a single applicant and the income limit is $2,982 per month. Alabama also offers the Independent Living Waiver. These programs may have limited enrollment slots.
Married couples — one spouse applying When only one spouse applies for Alabama Medicaid the community spouse — the spouse who remains at home — may retain 50 percent of the couple’s combined countable assets up to a maximum of $162,660. If 50 percent of the couple’s assets is less than $32,532 the community spouse may retain up to $32,532. The applicant spouse retains $2,000.
Monthly Maintenance Needs Allowance The minimum Monthly Maintenance Needs Allowance for the community spouse is $2,643.75 per month in 2026. Alabama uses the minimum standard — meaning the community spouse receives the lower allowance unless high housing costs justify a higher amount. The maximum is $4,066.50 per month.
Personal needs allowance — among the lowest in the country Alabama nursing home Medicaid recipients are allowed to keep only $30 per month as a personal needs allowance — tied for the lowest in the country. The remainder of income is applied toward the cost of care.
Look-back period and divestment penalty Alabama has a 60-month — five year — look-back period for nursing home Medicaid and HCBS Waiver applications. Asset transfers made within 60 months of applying that were for less than fair market value may result in a penalty period of ineligibility. The 2026 divestment penalty divisor in Alabama is approximately $7,500 per month reflecting the state’s average nursing home costs.
Estate recovery Alabama requires Medicaid estate recovery. After an Alabama Medicaid recipient dies the state seeks reimbursement from the probate estate for long term care costs paid. Planning with an elder law attorney can help protect assets from estate recovery.
How to apply for Alabama Medicaid Applications can be submitted online through Insure Alabama at insurealabama.org, by phone at 1-800-362-1504, or in person at your local county Department of Human Resources — DHR — office.
Alabama Medicaid administering agency Alabama Medicaid Agency — medicaid.alabama.gov
Alabama Estate Tax — 2026
No Alabama state estate tax Alabama does not impose a state estate tax. Alabama’s estate tax was tied to the federal state death tax credit which was eliminated by federal law effective 2005. No Alabama estate tax has applied since then.
No Alabama inheritance tax Alabama does not impose an inheritance tax. Beneficiaries who receive assets from an Alabama decedent owe no Alabama inheritance tax regardless of the size of the inheritance or their relationship to the deceased.
Federal estate tax Alabama residents may be subject to the federal estate tax. The federal estate tax exemption is $15,000,000 per person in 2026 following enactment of the One Big Beautiful Bill Act. The exemption is portable between spouses meaning a married couple can protect up to $30,000,000 from federal estate tax with proper planning. The top federal estate tax rate is 40 percent on amounts above the exemption.
No Alabama gift tax Alabama does not impose a state gift tax. Federal gift tax rules apply — the annual gift tax exclusion is $19,000 per recipient in 2026.
Alabama income tax — very favorable for retirees Alabama is exceptionally tax-friendly for retirees. Social Security benefits are fully exempt from Alabama income tax. All private and public pension income is fully exempt. Military retirement pay is fully exempt. IRA and 401(k) distributions are fully exempt. Alabama income tax rates range from 2 percent to 5 percent. Additionally Alabama uniquely allows residents to deduct their federal income taxes paid when calculating Alabama taxable income — significantly reducing the effective state tax burden.
Alabama property taxes — among the lowest in the country Alabama has the second-lowest effective property tax rate in the country at approximately 0.37 percent on owner-occupied homes. Residential property is assessed at only 10 percent of market value before the tax rate is applied making Alabama property taxes extremely low compared to most other states.
Alabama Advance Directives
Alabama law recognizes the following advance directive documents:
Alabama Advance Directive for Health Care Alabama uses a combined Advance Directive for Health Care that includes both the appointment of a healthcare proxy and treatment instructions including living will provisions. Must be signed and witnessed by two adults.
Alabama POLST — Physician Orders for Life-Sustaining Treatment Alabama uses a POLST form for seriously ill patients that documents specific medical orders regarding CPR hospitalization and artificial nutrition. Must be signed by a physician.
Alabama Do Not Resuscitate Order A physician order directing emergency personnel not to perform CPR. Alabama has standardized out-of-hospital DNR protocols.
Alabama Advance Directive Registry Alabama does not maintain a statewide advance directive registry. Copies of your advance directive should be given to your healthcare proxy physician and any hospital or care facility where you receive care.
Free Alabama advance directive forms Free Alabama-specific advance directive forms are available at caringinfo.org and from the Medical Association of the State of Alabama at masalink.org.
Alabama Key Agencies and Resources
Alabama Medicaid Agency Administers Alabama Medicaid including long term care programs. Website: medicaid.alabama.gov Insure Alabama Portal: insurealabama.org Phone: 1-800-362-1504
Alabama Department of Senior Services — ADSS Coordinates programs and services for older Alabamians including home care nutrition programs caregiver support and the Alabama SHIP program for free Medicare counseling. Website: alabamaagingnetwork.org Phone: 1-800-243-5463 Alabama SHIP — free Medicare counseling: 1-800-243-5463
Alabama Area Agencies on Aging Alabama is served by 13 Area Agencies on Aging that coordinate local services for older adults and caregivers. Eldercare Locator: 1-800-677-1116 or eldercare.acl.gov
Alabama Long Term Care Ombudsman Program Advocates for the rights of residents of nursing homes and assisted living facilities. Investigates complaints and helps resolve problems free of charge. Website: alabamaagingnetwork.org/ombudsman Phone: 1-800-243-5463
Alabama State Bar Lawyer Referral Service Connects Alabamians with attorneys including those who specialize in elder law and estate planning. Website: alabar.org Phone: 1-800-354-6154
Legal Services Alabama Provides free civil legal services to low income Alabamians including seniors on issues related to Medicaid benefits housing and elder law. Website: legalservicesalabama.org Phone: 1-866-456-4995
Alabama Veterans Resources
Alabama Department of Veterans Affairs — ADVA Provides services and benefits to Alabama veterans and their families including free VA claims assistance and connections to Alabama veterans resources. Website: va.alabama.gov Phone: 1-334-242-5077
Alabama State Veterans Homes Alabama operates veterans homes providing long term care to eligible veterans and their spouses. Facilities are located in Bay Minette Huntsville and Pell City. Website: va.alabama.gov/veterans-homes
Alabama Senior Property Tax Benefits
Homestead Exemption for Seniors and Disabled Alabama homeowners aged 65 and older or permanently and totally disabled or blind are exempt from the state portion of property taxes on their primary residence. County taxes may still apply. This is a significant benefit given Alabama’s already very low property tax rates.
Standard Homestead Exemption All Alabama homeowners who occupy their home as a primary residence qualify for a $4,000 reduction in assessed value from all property taxes. At Alabama’s 10 percent assessment ratio this exempts $40,000 of market value.
Disabled Veteran Property Tax Exemption Alabama veterans who are totally and permanently disabled due to a service-connected disability and their surviving spouses may qualify for a full exemption from property taxes on their primary residence.
Finding Elder Law and Estate Planning Attorneys in Alabama
The following resources can help you find a qualified elder law or estate planning attorney in Alabama:
- National Academy of Elder Law Attorneys — NAELA — naela.org — searchable directory by location
- Alabama State Bar Lawyer Referral Service — alabar.org — 1-800-354-6154
- Alabama Chapter of NAELA — Alabama has an active NAELA chapter with members throughout the state
- Legal Services Alabama — legalservicesalabama.org — free legal assistance for income-qualifying seniors — 1-866-456-4995
The information on this page is for general informational purposes only and does not constitute legal or financial advice. Alabama Medicaid rules and other figures change frequently. Always verify current information with the relevant agency or a licensed attorney. Laws vary and individual circumstances differ significantly.
Last updated: April 2026