Estate Planning for Marcellus Shale Landowners: Is It Safe to Wait and See?   Written By: Attorney Dale A. Tice   Anyone who ever picks up a newspaper is aware of the impact of development of the Marcellus Shale on Central and Northeastern Pennsylvania.  As development proceeds, it is becoming increasingly clear that natural gas production from the Marcellus is exceeding even the optimistic predictions of the natural gas companies.  But while landowners realize that there is a tremendous potential for life changing royalties, this potential wealth still seems unreal and uncertain for landowners not yet in natural gas production. Everyone realizes that there is a need for planning to protect this fabulous resource for future generations. However, conservative landowners don’t want to “count their chickens before they’re hatched.” With the uncertainty about future natural gas production, a landowner may decide to take a “wait and see” approach and put off planning until the royalty checks actually begin to arrive. Unfortunately, landowners who “wait and see” may be missing a fantastic opportunity to accomplish effective estate planning that actually takes advantage of the uncertainty regarding future royalties to reduce or even eliminate estate taxes. Before natural gas production begins, the value of a landowner’s oil and gas rights may be very low.  Until a well is actually drilled, it is impossible to predict absolutely what the future gas production will be.  But after drilling is complete and the property is placed into production, the uncertainty disappears and the value of the gas rights is likely to increase dramatically. The key to effective planning is making timely transfers of royalty interests to children while the value of the gas rights is low.  After production begins and the value of the gas rights has increased, planning will become much more complex.  Landowners who “wait and see” until royalty payments begin will have forever lost an opportunity to transfer gas interests to future generations at greatly reduced transfer tax costs. For landowners in the Marcellus Shale, the prudent approach is to plan now.  Effective planning can create a wonderful result with the parents retaining control of their property and the entire family sharing in the royalties. Most importantly, timely planning can protect the family from the potentially devastating impact of transfer and estate taxes, ensuring that the gas royalty wealth will benefit future generations for years to come. For more information on prudent planning for gas royalties see Jeff Marshall’s article New Gas Wealth Complicates Estate Planning for Landowners or visit our website for gas landowners at www.pagaslaw.net.   Home for the Holidays -- A Perfect Time for Communication   Written By: Attorney Tammy A. Weber, CELA   It’s that time of year . . . leaves are turning and falling to the ground, the air feels more crisp, stores are advertising for seasonal purchases and families are planning their holiday gatherings and celebrations.  Families and friends eagerly anticipate the time to get together and catch up.  Telephone calls, emails, and texts are exchanged regarding food and gift choices and arrival dates / times for out of town family members.  When the lines of communication are open and everyone is in one place, it is a great time to discuss estate planning concerns. Clients who have procrastinated, have experienced a health care or financial crisis and had to deal with many difficult issues at once often share with me that they “didn’t know how to start the conversation,” “the timing isn’t right,” or they were “afraid that this would be a burden on their children who are busy already.”  Whereas, at the time of the emergency, the clients’ children relate that they “wish mom and dad would have talked to them so they knew what they wanted.”  Additionally, spouses who have recently lost their mate are often confused and don’t know where to look for important financial documents, legal documents, deeds, passwords, safe deposit keys and the like.  One common denominator in all of this is family members do not want to make a crisis harder on their loved ones.  Holiday time is a perfect time to start or continue these discussions.  It may be as simple as talking about a friend’s family and how they handled things.  (Sometimes easing into one’s own family dynamics is accomplished more easily through the “I have a friend who . . .” approach).  I have found that an easy way to start discussions is by using the Health Care IQ Quiz that two people can take independently and then compare their respective answers to the same questions.  For example, the parent would answer the “imagine if you had . . .” questions, and the child would answer those same questions with what the child believed the parent would want.  They both compare answers and see how well the child understands the parent’s beliefs regarding potential health care situations. This gives the child insight and both parent and child peace. After health care issues are discussed, it is much easier to move onto financial discussions and explanations about what will happen when the parents can no longer live at home or eventually pass away. These decisions and any unresolved questions should then be discussed with a qualified elder law attorney.  This communication is a perfect gift for the present and the future. It’s very important to some of our clients that their children or a decision maker can accompany them to an appointment.  At Marshall, Parker & Associates, we have found that some clients prefer to schedule appointments over the holidays when out-of-town loved ones can also attend.  If you are interested in scheduling an appointment, please contact Lynn Wesley, our Scheduling Coordinator at 1-800-401-4552 or webmail@paelderlaw.com. You can also ask about our video conferencing capabilities offered at no charge to our clients and their families. Attorney Weber is a Certified Elder Law Attorney and a principal of Marshall, Parker & Associates. View Attorney Tammy Weber’s bio for more information.    Federal Court Rules That Medicare Coverage in a Skilled Nursing Facility Can be Approved Even if the Care Does Not Improve Functioning   Written By: Attorney Matthew J. Parker, CELA*   An admission to a nursing home often requires the care ordered by a physician and the skill of a nurse or other professional such as a physical therapist.   This “skilled care” is covered by the Medicare program for the first 100 days that the care is required on a daily basis.  (There is a co-pay after the first 20 days which is often covered by the resident’s supplement insurance). However, if the care does not improve the functioning of the resident, Medicare is often discontinued. The resident is told that Medicare will no longer cover the treatment because they have reached a “plateau” and the treatment is no longer resulting in improvement. A resident can appeal the nursing facility’s decision to discontinue Medicare. Few residents take an appeal, and in most cases, the treatment is discontinued even though it was helping the resident maintain their level of health. Now a federal court in Pennsylvania has ruled that improvement is not required for continuing Medicare coverage. Wanda Papciak was admitted to a nursing home after hip replacement surgery.  Upon her admission, she was unable to walk and could not use her walker due to what was later diagnosed as carpel tunnel syndrome. She was receiving physical and occupational therapy to help in the recovery from the surgery. After a month of receiving skilled care, it was determined that Wanda no longer needed the skilled care because she had made only minimal progress and therefore had reached her maximum potential for physical and occupational therapy. Medicare was discontinued for the remaining 10 days of Wanda’s stay in the nursing home. Wanda appealed the decision to discontinue Medicare.  The appeal eventually made its way to the Federal District Court for the Western District of Pennsylvania. The judge determined that before Medicare is discontinued, a decision must be made as to whether the skilled care is required to maintain a resident’s level of functioning.  The regulations provide that “[t]he restoration potential of a patient is not the deciding factor in determining whether skilled services are needed.  Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.”  42 C.F.R. 409.32(c). The failure to apply this standard contributed to the court’s decision that Wanda was inappropriately denied Medicare.Wanda Papciak’s case is important because most nursing facilities require that the resident be showing improvement to receive Medicare coverage.  According to the court, this is an incorrect standard.  Medicare can be approved if the medical evidence demonstrates that the treatment is preventing further deterioration or preserving current capabilities. Other residents similarly situated to Wanda Papciak now have a Federal Court opinion to support this position.     You can read the Federal District Court Decision in Papciak v. Sebelius online  Attorney Parker is a Certified Elder Law Attorney and a principal of Marshall, Parker & Associates. View Attorney Matthew Parker’s bio for more information.   Full Implementation of the Five Year Look-Back Period is Fast Approaching   Written by: Planning Specialist Josephine Reviello Remember when you heard about the Deficit Reduction Act of 2006 passed by Congress and signed by President Bush that changed the gift reporting period from three (3) years to five (5) years? That new five (5) year gift reporting period (also known as “look back” period) applied to gifts made after February 8, 2006.  Well, lo and behold, February 2011 is right around the corner and marks the full implementation of the five (5) year reporting period.  So, what does this mean? Well, first let’s clarify what the five (5) year look back or reporting period is:  It’s simply the process of reporting on the Medical Assistance application any gifts the applicant made from the date of applying back five (5) years – or currently to February 8, 2006.  For example, if I filed a Medical Assistance application on February 9, 2011, I would be required to report any gifts I made from February 8, 2006 to the time of application.  Any gifts I made before February 8, 2006 would not have to be disclosed, under normal circumstances. Let’s now think ahead beyond February 2011.  Does this mean Medicaid applicants filing after February 2011 must report gifts made from February 8, 2006 forward?  Thank goodness, no, but the five (5) years will still apply.  For example, if I file a Medical Assistance application in December 2011 then I should only be required to report all gifts I made from December 2006 forward.  Keep in mind; the gifts that are reportable are those of $500 or more in a given month. Gifts of $500 or less in a given month don’t have to be reported.  So, this is a little relief. Also, as you may already know, everything one reports on a Medical Assistance application must be verified with documentation.  Five (5) years of bank statements and copies of cancelled checks or check book ledgers is a lot of paperwork!  Not to mention possible fees and charges if one has not saved years of financial statements and copies of cancelled checks.  Fortunately, in my present experience with the Medicaid offices, not all have been requiring five (5) years worth of documentation. There are exceptions to certain circumstances where it is required.  So, keep those statements in a safe place. And if you don’t, hopefully, the banks or financial institutions you deal with are compassionate and considerate to your circumstances to waive those fees or charges for copies of those statements. So, before Congress decides to change the five (5) year reporting period to a seven (7) year reporting period, manage your estate wisely and plan for your future…..and save those financial statements!  Josephine has been a Planning Specialist with Marshall, Parker & Associates for eight years.  If you would like to learn more about Josephine, visit Marshall, Parker & Associates’ Staff Page. Attorney Grebas Provides Day-Long Legal Training for PA Association of Area Agencies on Aging (P4A)   Written by: Melissa Bottorf, Director of Marketing & Business Developement   Marshall, Parker Attorney Kevin Grebas recently provided day-long legal and financial training sessions for Area Agency on Aging caseworkers across the state.  He presented sessions in Pittsburgh, Harrisburg and Wilkes-Barre in Mid-October.  Attorney Grebas has been invited to do these training sessions for the past seven years. The trainings help caseworkers understand the different types of assets and legal documents that may impact the senior consumer. Kevin uses real-world case scenarios and provides each attendee with an extensive written desk reference.   If your organization would be interested in scheduling a training session with Attorney Grebas, please contact Melissa Bottorf at mbottorf@paelderlaw.com.   Marshall, Parker & Associates Participate in "Pinked" Day for Breast Cancer Awareness   Written by: Melissa Bottorf, Director of Marketing & Business Developement   If you stopped into any of Marshall, Parker & Associates’ offices on October 27th, you noticed something a little different. Not only were we wearing jeans, many staff members supported breast cancer research and awareness by wearing the American Cancer Society’s “Pinked” shirts. “We raised $250 for the American Cancer Society,” said Attorney Brenda Colbert, who organized the event.  It’s always great when we can show our support for a worthy cause. If you want to see pictures from our “Pinked” day and other office events, become a fan of Marshall, Parker & Associates on Facebook.   Keep Up to Date with Marshall Elder Law & Estate Planning Blog Written by: Melissa Bottorf, Director of Marketing & Business Developement 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   *Attorneys Marshall, Parker, Weber, Grebas and Colbert are Certified Elder Law Attorneys by the National Elder Law Foundation under Authorization of the Pennsylvania Supreme Court. LEARN MORE ABOUT THE CELA STATUS   **In addition to her law degree and CELA status, Attorney Colbert holds an advanced legal degree (LLM) in Estate Planning from the University of Miami School of Law. FIND OUT MORE

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