Powell’s insurer asks judge to rule on policy

$1.5 million: Brother, sister of Josh Powell sought claim information days after deaths; wife’s share also at issue

GENE JOHNSON; The Associated PressMarch 8, 2012 

A life insurance company has asked a federal judge to decide whether Josh Powell’s relatives are entitled to collect on a $1.5 million policy after he killed himself and his two sons last month.

In a complaint filed Friday in U.S. District Court in Tacoma, New York Life said that on Feb. 14, nine days after the deaths, it received inquiries from Powell’s sister Alina and brother Michael about how to make claims on the policy, which included $1 million for Josh Powell and $250,000 for each boy.

The company sent them claim forms, but the complaint does not say whether the siblings have filed them.

Alina Powell did not return an email seeking comment Wednesday.

The company asked to turn over to the court’s control the proceeds payable under Josh Powell’s five-year term policy, as well as a $1 million policy covering his wife, Susan Cox Powell, who disappeared from their Utah home in 2009 and is presumed dead.

Susan Powell’s parents, Chuck and Judy Cox of Puyallup, plan to file their own probate action in state court. Attorney Anne Bremner filed a notice Wednesday that she will represent the couple in the federal court case.

The two policies for Josh and Susan Powell were taken out in 2007, New York Life’s lawyers wrote. Susan Powell was initially the beneficiary of Josh Powell’s policy; he was the beneficiary of hers.

The insurer is asking Judge Ronald Leighton to decide who, if anyone, gets the money from the policies, saving the company from being sued over any decisions it might otherwise make.

“The pending and potential claims are such that New York Life cannot determine without hazard to itself which of them, if any, is legally entitled to the policy proceeds without assuming the responsibility of determining doubtful questions of law and fact,” the company’s attorneys wrote in a complaint.

In February 2009, Josh Powell added a newly established family trust set up in the couple’s names as the secondary beneficiary of his policy. Under provisions of the trust, Powell’s brother, Michael, and Susan Powell’s father, were listed as joint trustees of the estate in the event the couple declined or were unable to administer it.

Josh Powell continued making monthly premium payments on the policies after moving to the South Hill home of his father, Steve, according to the court filing.

He altered his policy again Oct. 3, 2011, removing his wife as the primary beneficiary.

The modification came seven business days after the arrest of Steve Powell on charges of voyeurism and possession of child pornography and three days after Pierce County Superior Court Judge Kathryn Nelson temporarily placed Charlie and Braden with the Coxes.

Josh Powell also dropped the family trust as a beneficiary.

Instead, he named his brother Michael Powell and sister Alina Powell as his primary beneficiaries and his brother John as the secondary beneficiary. He also listed himself, his brother and his sister as primary beneficiaries on his sons’ policies.

Two months later, he made yet another change to his policy. He divided the policy’s proceeds among his three siblings, with a 93 percent share to Michael, 4 percent to Alina and 3 percent to his other brother, John.

In the event Michael was not living, Josh Powell designated that the proceeds be split equally between his sister and his father, who also was named as the sole secondary beneficiary of the policy. At the same time, Josh Powell listed himself as the beneficiary of his sons’ policies, with Michael the secondary beneficiary.

Among New York Life’s questions is whether the changes Josh Powell made are valid. Susan Powell might have had a community-property interest in the policy, so it’s not clear her husband could cancel her as the beneficiary without her consent, the lawyers wrote.

Furthermore, given his suicide, it’s not clear Josh Powell was legally competent to make those changes when he did so last October and December, the lawyers wrote.

Many life insurance policies contain wording that renders them void in the event of suicide. It wasn’t immediately clear whether Josh Powell’s policy contained any such language; the complaint made no reference to that issue.

Susan Powell disappeared from the couple’s home in West Valley City, Utah, in December 2009. Josh Powell claimed he had nothing to do with it: He had taken the boys, then 4 and 2, on a midnight camping trip in the desert, during a snowstorm, when she vanished.

A few weeks later, he moved with the boys to his father’s home and worked from the home as a computer programmer.

Steve Powell was arrested and charged with child pornography and voyeurism in September. The state removed the boys from the home and turned them over to the care of Susan’s parents, Chuck and Judy Cox of Puyallup.

On Feb. 5 – after incestuous images found on his computer prompted a judge to order him to undergo a psycho-sexual evaluation – Josh Powell locked a social worker out of his Graham-area house, attacked the boys with a hatchet and then ignited the home.

The Salt Lake Tribune and The News Tribune contributed to this report.

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