Medicaid Planning
Alabama Medicaid covers long-term nursing home care, but the rules — a five-year look-back on asset transfers and a spend-down to a small countable-asset limit — generally mean planning has to happen years before care is needed.
What you should know
- Medicaid eligibility in Alabama generally requires a single applicant to reduce countable assets to a small threshold. Married couples have separate rules that protect a share for the spouse at home.
- Medicaid reviews every asset transfer made in the five years before an application. Transfers within that window — including transfers into a trust — can trigger a period of ineligibility.
- A Medicaid Asset Protection Trust, properly structured and funded at least five years before care is needed, can remove qualifying assets from countable resources and from estate recovery.
- Alabama also runs a Medicaid estate recovery program, which may seek reimbursement from a recipient’s estate after death — including from the home, unless protected by advance planning.
- Even when care is already needed, crisis planning options — spousal protections, the caregiver-child exception, exempt-asset strategies — may still preserve meaningful assets.
What it looks like for one family
The same savings can be spent down to nearly nothing or largely preserved — proactive planning is what separates the two.
Waiting until care is needed
Most of the savings spend down
When Bob Caldwell needs nursing care, the family scrambles. With no advance plan, much of the couple’s savings must be spent down before Medicaid will pay — leaving Peggy with less than they hoped.
Planning years ahead
A protected share stays with the family
Because they set up a Medicaid Asset Protection Trust and used spousal protections well before care was needed, qualifying assets are shielded from spend-down and estate recovery — and Peggy keeps a secure share.
Bob, Peggy, and the Caldwell family are a composite example used to show how the choice plays out — not a real client. The five-year timing is essential; crisis planning after care is needed is more limited.
Is now the time to start Medicaid planning?
Five short choices. Brent reads your answer back to you at the end.
A 30-second guided quiz. Get a personal read on whether Medicaid planning fits.