Gas Law Lingo Defined & Explained: What is a "Division Order?"   Written By: Attorney Dale A. Tice This is the fourth installment in a series written by Marshall, Parker lawyer Dale A. Tice.  Dale is a nationally recognized expert on planning for landowners in the Marcellus Shale regions of Pennsylvania.  He has been quoted in the New York Times and Investor’s Business Daily. In issues of this newsletter, Dale is defining a common term used in the Marcellus shale industry and then explaining why it’s important to you as a landowner, professional or consumer living in our region.  If you would like regularly updated information about gas developments in the Marcellus shale, you can also follow Dale Tice on Twitter at http://twitter.com/PAGasLawGuy Many landowners who have been reading about the development of the Marcellus shale or have attended educational workshops are familiar with production units.  The gas leases used by companies drilling in the Marcellus allow the gas companies to combine or pool the properties of multiple landowners into a production unit.  The unit defines the area that the company intends to produce natural gas from by drilling multiple horizontal wells.  All of the landowners with acreage in the unit will share in the royalties based on their proportional ownership of the unit. To properly apportion royalties, the gas company will calculate each landowner’s interest in gas production from wells drilled on the unit – this interest is expressed as a number called the Decimal Interest.  The decimal interest is calculated by dividing the number of acres the landowner has in the unit by the total number of acres in the unit, multiplied by the royalty percentage under the gas lease.  For instance, a landowner who had signed a lease with 15% royalties and now has 200 acres in a 600 acre production unit would have a decimal interest as follows:   200 Acres DIVIDED BY 600 Acre Production Unit MULTIPLIED BY 15% Royalty   EQUALS   .04999999 Decimal Interest   Thus, if one well on the unit produced $1,000,000 of natural gas, the landowner’s share would be: $1,000,000 MULTIPLIED BY .04999999 EQUALS   $49,999   Similarly, if six wells produced $6,000,000, the landowner’s share would be: $6,000,000 MULTIPLIED BY .04999999 EQUALS   $299,999     Before receiving their first royalty check, most landowners will be asked to sign a document called a Division Order which will list the property owner’s decimal interest in the gas produced from a pooled production unit.  Though some gas companies do not use division orders, many of the large gas producers will require the return of a signed division order before issuing any royalties.  There are a number of issues to consider before signing a division order.  Checking the math to make sure that the gas company has calculated the decimal interest correctly is obviously important, but landowners must also read the document carefully.  In some cases the division order may attempt to change the terms of the oil and gas lease, possibly removing some of the protections that the landowner negotiated into the lease.  Most division orders will also include a warranty of title by the person signing, which is advantageous for the gas company, but not for the landowner.  Because a division order is a binding legal document that will directly impact a landowner’s royalties, it is generally recommended that a division order be reviewed by an experienced oil and gas attorney before signing.   Join Attorney Tice for a Free Workshop on Gas Royalty Planning Issues on Thursday, September 23, 2010 at the Hepburnville Fire Company Social Hall.  He will discuss how to limit taxes, family partnerships & LLCs and how you can preserve your mineral rights for future generations. For more information or to register, visit www.pagaslaw.net; If you are a lawyer, Dale will be teaching at the Pennsylvania Bar Institute’s 2nd Annual Oil and Gas Colloquium for Lawyers, in Mechanicsburg on Tuesday, September 14th.  For more information or to register click here.   To view our past installments of “Gas Law Lingo: Defined & Explained” visit our articles page at http://www.pagaslaw.net/Articles.html   Do I Need a Trust to Get VA Pension Benefits? Written By: Attorney Jeffrey A. Marshall, CELA Recently, another lawyer asked me about a company that was recommending that an assisted living resident set up an irrevocable trust in order to qualify for VA benefits. I have noticed that a number of this type of “VA benefits planning” companies have been advertising lately. Some Assisted Living Facilities are even referring their residents to them. Seniors should be careful in dealing with these outfits. In the right circumstances VA Pension benefits can be a valuable financial support for a Veteran or the widow of a Veteran. Many veterans who are over age 65 can qualify for benefits if their income is below the maximum annual pension rate (MAPR), and the veteran has limited net worth. Current pension rates are available online at http://www.vba.va.gov/bln/21/Rates/pen01.htm. The amount of benefits available can be significant. The MAPR for a Veteran who needs aid and attendance and has one dependent is currently $23,396. The veteran’s net countable annual income for VA purposes (IVAP) is deducted from the MAPR to determine if the Vet is eligible for a pension payment. If the veteran’s IVAP is below the MAPR, and the veteran has limited net worth on which to draw for support, the veteran may be financially eligible for a monthly pension allowance. VA awards monthly compensation in an amount necessary to bring the veteran’s income up to the monthly pension allowance. Higher pension allowances are available if the Veteran is housebound or in need of “aid and attendance. Pension eligibility is often overlooked because people are not aware of it at all or do not know that IVAP is reduced by your out of pocket medical expenses. For a resident of an assisted living facility, the entire cost can be deductible. Thus, a Veteran who is paying for long term care expenses for himself or his spouse may have a much reduced IVAP and thus qualify for Pension. Veterans who are over the VA net worth limits sometimes seek to reduce their resources to “jump start” eligibility. Reduction of assets to qualify for VA and other benefit programs is fraught with potential pitfalls involving complicated legal and ethical issues. The ethical issues are particularly problematic if the elder lacks capacity or may be subject to “undue influence” from a family member, or if the effect of transfers would alter an established estate plan.    A contemplated transfer to obtain VA Pension must be also evaluated for its impact on eligibility for Medicaid. VA and Medicaid rules differ markedly in their treatment of transfers of assets.  Unlike Medicaid, no transfer penalty is applied to the transfer of assets that occurs prior to filing a claim for VA pension. On the other hand, VA does not recognize some transfers that would be deemed complete for Medicaid purposes. 38 CFR § 3.276(b) specifies that certain transfers or waivers are disregarded. (b) Transfer of assets. For pension purposes, a gift of property made by an individual to a relative residing in the same household shall not be recognized as reducing the corpus of the grantor’s estate. A sale of property to such a relative shall not be recognized as reducing the corpus of the seller’s estate if the purchase price, or other consideration for the sale, is so low as to be tantamount to a gift. A gift of property to someone other than a relative residing in the grantor’s household will not be recognized as reducing the corpus of the grantor’s estate unless it is clear that the grantor has relinquished all rights of ownership, including the right of control of the property. Knowledgeable elder law attorneys are very much aware of Pension and factor it into the planning for their clients. Irrevocable trusts are sometimes used to reduce the Veteran’s net worth to the required level. A carefully crafted trust is one of the tools in the elder law attorney’s planning arsenal, although transfers to a trust are often inappropriate for ethical reasons or the due to the transfer’s impact on Medicaid eligibility. Also, of note: Federal law places limitations on who can represent a veteran in regard to a VA claim. Only certain persons can represent a veteran in regard to a claim for benefits: 1. The Claimant can represent himself directly. 2. A Veteran Service Organization (VSO) that is accredited through the VA.[1]  A listing of approved organizations is available online at http://www.va.gov/ogc/recognizedvsos.asp 3. An individual Agent who has been accredited by the VA.   4. A “one-time” power of attorney person (for example, a child or relative of the claimant). 5. Employees of Banks or Trust Companies or other corporate entities acting as guardians for claimants. 6. Lawyers who are accredited by the VA “to represent a claimant before the Department on a claim for VA benefits.” The lawyer must be a member in good standing with a State Bar AND be accredited by the VA. Accreditation means the authority granted by the VA to representatives, agents, and attorneys to assist claimants in the preparation, presentation, and prosecution of claims for VA benefits. Without accreditation, a lawyer may not independently assist claimants in the preparation, presentation, and prosecution of claims for VA benefits.  I am a VA accredited attorney. But you should know that accreditation alone doesn’t mean that a lawyer or agent is all that knowledgeable about VA benefits. It is relatively easy for a lawyer to get accredited by merely filing a form and taking a few hours of education.  However, lack of accreditation can be taken as a “warning flag” suggesting that the veteran be wary of an “advisor” who has not even taken this basic step. Veterans should therefore ask if the person providing the advice is “accredited by the VA.”  You can check on whether an advisor has been accredited by the VA on the VA website at  http://www4.va.gov/ogc/apps/accreditation/index.asp VA accreditation does not appear to be required to “discuss VA benefits” with an individual or group of individuals.  An attorney’s or agent’s consultation with a client or prospective clients concerning the Pension benefits that might be available are beyond the scope of VA  regulations until the individual becomes a “claimant” as defined in the regulations. One interesting aspect of VA benefit law is that it is illegal to charge a Veteran for the helping the Veteran file any application for benefits.  If accredited, an attorney or agent may assist with filing applications but in most cases may not charge for doing so. Even though the attorney or agent does not charge, VA accreditation is still required to assist claimants in the preparation, presentation, and prosecution of claims for benefits before VA. (For more on accreditation, click here.) With this complicated background – I tried to answer the inquiry from my lawyer colleague: what is it these VA Pension consulting firms are doing?  The answer varies depending on the consulting firm.  But here are a couple of possibilities: 1. Some are operating in a manner similar to a living trust mill – for a couple of thousand dollars they will set up a trust for you (whether you need one or not).  As noted, trusts for Pension benefits can be problematic because of the ethical implications and the disconnection between VA Pension rules and Medicaid rules. 2. As with many living trust mills, these outfits may sell high commission and inappropriate financial products (such as high commission annuities) in conjunction with the trust “planning. 3. They may serve as a “feeder” for lawyer on non-lawyer agents. If they are doing trusts they are probably practicing law and thus may seek to protect themselves by establishing some connection with a lawyer. In Pennsylvania there are a number of companies offering to do Pension planning for residents of assisted living facilities.  In some cases, the facilities refer the residents to the planning firm and may even pay the outfit to file an application for the resident (although this is of questionable legality due to the prohibition on charging for assisting a Veteran file an application). And seniors and their family members should always be concerned if the planning firm wants to sell financial products as part of the planning. If you are approached by a VA benefits planning company, you might want to get a “second opinion” from a certified elder law attorney before acting on the company’s advice.  A list of all the certified elder law attorneys in Pennsylvania is available at www.nelf.org. Are you interested in learning more about the Veteran’s Aid & Attendance Program? If so, join Certified Elder Law Attorney Matt Parker & Lycoming County Veteran’s Affairs Coordinator Don Cohick for an information session on Wednesday, September 15, 2010 at 6:30 PM at Elmcroft of Loyalsock. RSVP at 321-9008 or webmail@paelderlaw.com    Making Good Health Care Decisions: What is a "Pink Card" and Should I Have One?   Imagine that you have been injured in an accident and are unable to make important medical decisions for yourself. Who should make those decisions for you? How will the Doctor and Hospital know who is authorized to speak on your behalf? The law allows you to name your spokesperson, but most people have never made that vital choice. In 2006, a Williamsport area physician, Dr. Alexander Nesbitt, set out to make his community different.  Under the guidance of Nesbitt, a county-wide task force began investigating ways to ensure that local residents receive the care they want when they are not able to speak for themselves. The first step was to develop procedures to make sure that health providers were effectively communicating patient wishes between themselves. The result was the adoption of a POLST Form (Physician Order for Life Sustaining Treatment) by local hospitals and nursing facilities. It was only natural for the task force to move on from health professionals to all the residents of the community.  The problem was – how to provide an easy and no cost way for adults to designate the person they want to be their health care spokesperson. With the help of grant money from the First Community Foundation, The Lycoming United Way, and the Blue Ribbon Foundation, the task force developed the concept of “Pink Cards. Pink Cards are a free and easy way for local residents to appoint their health representative. Your Pink Card names the person you have chosen. This person will be authorized to guide your treatment if you ever lose the ability to make decisions. The Pink Card can be carried in your wallet or purse so that your doctor and other health care professionals will know who is in charge and how to contact that person. Planning in advance is an important task for all of us, whether young or old, healthy or facing challenges. By carrying a Pink Card, Lycoming county residents of all ages can now make their choices known about who will guide their health care in the event of an emergency. Designating your representative is an important first step in ensuring that the right medical decisions will always be made for you.  In addition to distributing Pink Cards, the Northcentral Pennsylvania Advance Care Planning Task Force is also available to help individuals and groups understand the process of advance care planning. Its goal is to help area residents control their health care by becoming more knowledgeable about options, discussing their views with their family and other caregivers, and documenting their decisions.   You can view the Task Force’s Brochure online and find out how you can get your pink card. You can also obtain pink cards and the brochure by calling Linkage Lycoming at 570-323-8555.    Melissa Bottorf and Jeff Marshall of Marshall, Parker & Associates are members of the task force and are the primary authors of the above article. Bottom Limit of the MMNA to Remain Unchanged in 2010   Written by: Attorney Jeffrey A. Marshall, CELA* If a married nursing home resident receives Medicaid long-term care benefits, his or her community spouse is entitled to retain a certain minimum level of income called the Minimum Monthly Maintenance Needs Allowance (MMMNA).  If the community spouse's own income is insufficient to provide this income allowance, income can be diverted from the institutionalized spouse. The MMMNA must be at least 150% of the federal poverty level for a family of two plus an excess shelter allowance. The minimum MMMNA is set by federal law and is usually adjusted no later than July 1st of each year to keep up with inflation. But 2009 was an unusual year because the recession resulted in a lack of inflation. Imagine the landowner’s dismay when she reads the Declaration of Pooling and Unitization and realizes that her property has been “clipped” and that and only a small portion of her land has been included in the production unit. Unfortunately, this is the reality for many Pennsylvania property owners. Now, the U.S. Department of Health and Human Services has announced that the poverty income guidelines will continue at their 2009 levels for the remainder of 2010. This means that the lower limit of the community spouse minimum monthly maintenance needs allowance (MMMNA), will remain at $1,821.25 in Pennsylvania.  (In Pennsylvania, the poverty guideline remains $10,830 for one person and $14,570 for a couple.) As noted above, the minimum MMMNA is 150 percent of the monthly poverty guideline for a couple. A complete explanation of the how the income allowance of the community spouse is determined is available on the Marshall, Parker & Associates website in the article: Determining the Community Spouse Monthly Maintenance Needs Allowance (CSMMNA), (click here) For a full list of the poverty income guidelines for the remainder of 2010, click here. Become a Fan of Marshall, Parker & Associates on Facebook Written by: Attorney Kevin R. Grebas, CELA*   Chances are most of you reading this article have at least heard of Facebook.  It is quite likely that many of you are also active users of Facebook, which is the largest social networking website in the world.  What began in February of 2004 as a website available only to students of Harvard University has now grown to include over 400 million users worldwide.  To put that into perspective, if Facebook were a country, it would be the third most populous country in the world! Marshall, Parker & Associates has now joined this ever-expanding group of Facebook users by establishing its own Facebook page.  We invite those of you who are Facebook users to become fans of Marshall, Parker & Associates by visiting our Facebook page.  This will be another method by which you can keep up-to-date on laws, regulations and programs affecting the fields of Elder Law and Estate Planning.  It will also give you an opportunity to see a different side of our firm’s members through the posting of information and photographs from our community events.  Over the next few months, we will be adding many more features to our Facebook page.  We hope to see you soon on Facebook!               Attorney Grebas is a principal and Certified Elder Law Attorney at Marshall, Parker & Associates.  More information about Attorney Grebas is available on our website. Keep Up to Date with Marshall Elder Law & Estate Planning Blog At Marshall, Parker & Associates we believe that we can “give back” to our community by providing our clients and their families and advisors with up to date information on the legal issues that affect them.  The laws and regulations that impact the estate planning and elder law concerns of our clients change rapidly. This year has already seen dramatic change with the enactment and implementation of the new health care reform laws. And the development of Marcellus Shale gas is having a tremendous impact on our community. The laws on federal estate tax have become relevant to many additional residents of our area due to the wealth being created by the development of the Marcellus Shale. Federal Estate tax laws will change dramatically in the next few months, although at this moment no one can tell how. In an effort to keep the clients and friends as up to date as possible on these and other critical legal issues,  Marshall, Parker & Associates is increasingly our use of social media (such as Twitter and Facebook) to keep you more immediately informed.  Our lawyer Dale Tice is recognized as one of Pennsylvania’s leading legal experts on the Marcellus and planning for gas royalties. You can follow Dale’s posts on Twitter at http://twitter.com/PAGasLawGuy. Jeff Marshall posts on Twitter on estate planning, elder law, and aging issues, as well as on the Marcellus Shale.  You can follow Jeff’s posts at http://twitter.com/ElderLawGuy.  (Jeff’s posts are also available on the Marshall, Parker website homepage at www.paelderlaw.com.) Now you can also receive information and guidance from Jeff Marshall at his newly established blog, the Marshall Elder & Estate Planning Blog. The blog includes access to all Jeff’s Twitter “tweets” and much more.  The blog is new and Jeff welcomes (and would appreciate) if you visit and tell him how to make it even more useful and valuable for you. You can comment directly on the blog, or by sending an e-mail to us as webmail@paelderlaw.com.   State College Planning & Paying for Long Term Care Saturday, September 11, 2010 10:AM -12:00 PM The Hilton Garden Inn 1221 East College Avenue in State College, PA 16801 Attorney Tammy Weber Register Here Montoursville Veteran’s Benefits Aid & Attendance   Co-Presented with Don Cohick, Lyco County Veteran’s Affairs Coordinator Wednesday, September 15, 2010 6:30 PM – 8:00 PM Elmcroft of Loyalsock   2985 Four Mile Drive in Montoursville, PA 17754 Attorney Matthew Parker Register Here Mt. Pocono Planning & Paying for Long Term Care Saturday, September 18, 2010 10:AM -12:00 PM Famularo’s Catering PA Route 940 in Mt. Pocono, PA 18344 Attorney Brenda Colbert Register Here Hepburnville NEW! Gas Royalty Owners’ Workshop   Thursday, September 23, 2010 6:30 PM – 8:00 PM Hepburville Fire Company Social Hall 615 State Route 973 in Cogan Station, PA Attorney Dale Tice Register Here Marshall, Parker & Associates Works to End Alzheimer's by Participating in the 2010 Memory Walks   Marshall, Parker & Associates is proud to be a corporate sponsor for the 2010 Memory Walk for Lycoming-Clinton County and in Wilkes-Barre/Scranton.  You can join our team to help raise money and find a cure for Alzheimers.   If you have a loved one who is affected by Alzheimer’s or who has passed away, you can purchase an 11 x 17 laminated sign with their name and/or photo. It will be displayed along the walk route on October 2nd.  More information and an order form is available at: http://www.paelderlaw.com/2010_memory_walk.html     Lycoming/Clinton Walk at Indian Park in Montoursville on Saturday, October 2, 2010 http://www.kintera.org/FAF/home/default.asp?ievent=338572       Wilkes-Barre/Scranton Walk at PNC Field on Saturday, October 9, 2010http://www.kintera.org/FAF/home/default.asp?ievent=339999   On Thursday, August 26, 2010, the Marshall, Parker & Associates Memory Walk Team hosted a Guest Bartending Night at Anthony’s Restaurant in Old Forge PA to raise money for the Alzheimer’s Associates.  Our own Jerry Petro and Kevin Grebas tended bar with Marie Coyle from Green Ridge Health Care Center.  We are grateful to our friends and family for attending the event and making it such a huge success.  We especially appreciate the very generous donations that we received from the following: Anthony’s Restaurant, Rossi’s Market, Harrington’s Beer Distributers, Prime Med/Viewmont Medical, LIFE Geisinger, the Alzheimer’s Association, Green Ridge Health Care Center, and Lillian Colbert. Log on to Facebook to view pictures from the event!

DISCLAIMER The comments contained in this newsletter are intended to be of a general nature only, do not constitute legal advice, and no recipient is entitled to rely on them for any purpose. The distribtion and receipt of this e-mail does not create an attorney-client relationship.