We're very pleased to present the fifth in a series of articles about legal resources for same-sex couples. Our goal is to make sure that your gay or lesbian family is protected, both as you plan your gay wedding and continue your lives together. The article below was written by Claire Bartholome, who in addition to being an estate planning attorney, is also a client of 14 Stories.
A marriage gives you automatic inclusion within and under hundreds of state laws that apply to spouses, family, and next of kin. With the rights of marriage, however, come responsibilities, and while we celebrate gains in equality no matter the consequences, same-sex couples should understand what true marriage “recognition” will mean for them. Over the next few weeks I will be discussing situations where marital recognition may have mixed consequences for same-sex couples.
This week: eligibility for long-term care coverage under Medicaid. In Massachusetts, same-sex spouses now have full marital recognition for MassHealth, the state Medicaid program, which can have positive or negative effects depending on the relative wealth of the spouses.
MassHealth views the couple’s combined assets in order to determine eligibility, so if the healthier spouse has significant personal wealth, he or she will need to spend down countable assets until they total less than approximately $112,000 (not including a home worth less than $750,000) in order for the less healthy spouse to qualify for coverage.
On the other hand, if the couple’s combined countable assets are $112,000 or less, the spouse in need of long-term care will qualify for MassHealth. If the couple were not considered married for the purposes of MassHealth, the spouse in need of care would have to spend down to $2,000 before he or she would qualify and would not be able to transfer any assets to a non-married partner.
Generally, if an individual were to transfer assets to someone other than a spouse within 5 years of applying for MassHealth coverage, he or she would be subject to a disqualification period of 1 day for every $267 transferred. Since same-sex marriages are recognized, spouses are allowed to transfer assets between themselves freely without incurring a disqualification period.
Coupled with Federal gift tax law, however, transferring assets between same-sex spouses may still incur tax liability. An individual can transfer $13,000 per year to any person, but when significant asset transfers are on the line, taxes may be imposed. Each person can transfer up to $1,000,000 in a lifetime, but each gift made during life is deducted from that total. While the Federal government provides that “married” persons can transfer assets freely between one another without gift tax liability, this applies only to opposite-sex spouses as a matter of Federal law.
Being treated as a married couple for the purposes of MassHealth requires much more planning than if spouses are considered separately, and the benefits of recognition are tempered by continued discrimination on the part of the Federal Government. These challenges, however, will continue to be a part of the fight for equality … for better or for worse.
Claire Bartholome is an Attorney with the Law Office of William J. Brisk. Her practice specializes in estate planning for same-sex couples in order to combat discrimination, legal challenges, and prejudice. This information is not intended to provide legal advice. For information as to how the laws apply to your specific situation, consult an attorney. www.briskelderlaw.com
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