A federal judge in Tacoma has ordered contested life insurance proceeds be split between Josh Powell’s beneficiaries and a conservatorship and trust benefiting the heirs of his missing wife, Susan Cox Powell.
The judge rejected an argument by Susan Powell’s parents, Chuck and Judy Cox of Puyallup, that their late son-in-law’s beneficiaries be prohibited from collecting life insurance proceeds.
Josh Powell is believed to have killed Susan Powell in Utah in 2009. He then moved to Pierce County, where he killed himself and the couple’s boys.
Federal Judge Ronald Leighton in the Western District of Washington said even though Susan Powell is legally considered alive — given that she has never been found and has not yet been declared dead — her life insurance proceeds can be distributed.
Thomas West, a lawyer working with the Powell family, said Monday that Josh Powell’s father, Steven Powell, has disclaimed any interest in the proceeds. That means the bulk of it will go to Powell’s mother, with smaller amounts going to Josh Powell’s sister and his surviving brother.
The decision amplifies a dispute between the quarreling Powell and Cox families about who should be trustees and beneficiaries for Susan Powell’s conservatorship and a related trust.
Leighton ordered a split of two New York Life policies — one on Josh Powell, valued at more than $1 million; and a rider covering the Powell’s sons, valued at more than $500,000— with half going to the Powell beneficiaries and the other half going to Susan Powell’s conservatorship.
The conservatorship will receive all of another $500,000 policy on Josh Powell.
A $1 million policy on Susan Powell will go to a trust holding her and Josh Powell’s assets.
Josh Powell was in the middle of a custody battle with the Coxes when he torched his rental home in Graham on Feb. 5, 2012, killing himself and sons Charlie, 7, and Braden, 5. He also had been named a person of interest in the disappearance of his wife, who was last seen Dec. 6, 2009, at her West Valley City, Utah, home.
The Cox family fought the even distribution of a policy for Charlie and Braden. The Coxes argued that Washington law prevents killers and abusers from collecting life insurance proceeds from their crimes, and that “slayer statute” should be applied to Josh Powell’s beneficiaries.
But Leighton wrote that was too broad an interpretation of the law and that the prohibition only applies to the killer.
“Neither Joshua nor his estate will be unjustly enriched if his one-half interest in the rider proceeds is distributed according to the terms of the policy,” Leighton wrote.
Anne Bremner, an attorney for the Coxes, said the judge’s strict interpretation failed to take into account the twists and turns of Susan Powell’s disappearance, including how Josh Powell changed his beneficiaries after she vanished.
“It’s our position,” Bremner said, “there’s really no case like the Susan Cox Powell case.”
Bremner remains unconvinced that Josh Powell’s father has waived any claims to the insurance money. Steven Powell was recently released from a Washington prison, where he served time for taking videos of young neighbor girls undressing and using the bathroom. Bremner won a $2 million judgment on behalf of the girls.
Bremner said the Coxes are unlikely to appeal Leighton’s decision and will focus on a Utah case.
In state court in Salt Lake City, the Powells and Coxes have been arguing about the conservatorship and trust holding assets belonging to Josh and Susan — assets that now include $2.55 million in life insurance money. The Coxes are the trustees and beneficiaries of the conservatorship and the trust.
However, Terrica and Alina Powell — Josh’s mother and sister, respectively — contend the terms of those agencies were illegally changed to remove them as trustees or beneficiaries.
Joshua Lee, a lawyer for the three Powells, said Monday that a motion is pending in state court in Salt Lake City to restore his clients as beneficiaries or trustees.
The Associated Press contributed to this report.