The Power of Gifting - Make Sure You Know Your Duties!

A jury convicted Ronnie Lee Natho, Sr. of misapplication of an elderly person’s property and sentenced him to twenty-five years. See Tex. Penal Code § 32.45(b). The appellate court, in Natho v. State (Tex. Ct. App., 3rd Dist., No. 03-11-00498-CR, Feb. 6, 2014), upheld the conviction.

Ronnie Lee Natho, Sr. (“Natho”) is the former grandson-in-law of the elderly Rosie Shelton (“Rosie”). Rosie Shelton appointed Natho to serve as her Agent in the Power of Attorney she executed in July of 2005. The document contained a provision that would have given Rosie’s Agent the power to make gifts from her Estate. However, the document was set up so that Rosie had to initial beside the provision if she actually wanted Natho to have the power to make gifts from her estate. Rosie did not initial next to the provision.

In late 2007, Rosie was no longer able to care for herself. She was admitted to a hospital and then moved into a nursing home.   Shortly thereafter, Natho transferred to himself ownership of Rosie’s vehicle. Next, Rosie received a letter from her insurance company, confirming that ownership of her $3,000 life insurance policy had also been transferred to Natho. As if that was not enough, Natho then signed a general warranty deed, deeding Rosie’s house to himself in exchange for ten dollars ($10). Rosie’s friend finally noticed that Rosie’s car was missing and that the locks to Rosie’s house had been changed. She told Rosie right away. This led to Rosie executing a new power of attorney and appointing her granddaughter as her Agent instead of Natho.

Natho apparently had met with an attorney who was experienced in helping clients qualify for medicaid. The attorney told Natho that he could pay for the nursing home with Rosie’s assets until she had less than two thousand dollars ($2,000) left, or he could choose a “spend-down” option. The “spend-down” option, meant gifting the assets until Rosie qualified for Medicaid. Natho claims he chose the “spend-down” option.

While Natho argued he was “spending down” Rosie’s assets so she could qualify for Medicaid, his argument was flawed. Rosie’s house, car, and life insurance proceeds would all have been excluded from her estate and not considered in her Medicaid application. Therefore, the gifts he gave to himself did not benefit Rosie in any way.

Furthermore, Natho gave himself title to the vehicle before even meeting with the attorney and discussing the Medicaid process. When Natho was instructed to return the vehicle and other assets to Rosie’s name he, instead, sold the car and cashed out the policy, keeping the proceeds for himself.

Unfortunately Natho did not have Rosie’s best interests at heart. Even if he had, this case demonstrates the importance of knowing what powers you are granted if you are appointed to act as a loved one’s Agent. It also shows the importance of appointing someone you can count on to be your Agent. Finally, it is necessary to make sure you update your documents, so you don’t leave your former-grandson-in-law making important financial or medical decisions for you.

-  Aubrey Mirkin, Esq.

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