Judge orders Josh Powell life insurance money split 50-50

A federal judge says Josh Powell’s family can share in the insurance proceeds from the lives of the two young sons he killed in 2012.

The ruling by U.S. District Judge Ronald Leighton last week came in a dispute between the families of Powell and his long-missing wife, Susan Powell, over three insurance policies and associated riders.

Josh is believed to have killed Susan in Utah in 2009. He then moved to Washington state, where he killed himself and the couple’s boys.

Under the ruling, about $793,000 will go to Powell’s family. Of that, $264,000 is from a rider covering the lives of the boys.

About $2.2 million is going to a trust and to Susan’s father Chuck Cox as conservator. The Powells believe that money should be split between the families, but that remains pending before a Utah judge.

“It’s just been a horrible tragedy, a hatchet, fire, Susan’s been missing over five years and now we’re dealing with the proceeds of a life insurance policy,” said Cox family attorney Anne Bremner in an interview Monday with KIRO Radio’s Ron and Don Show.

Josh Powell’s New York Life policy, worth over $1 million plus interest, will be split 50-50 among Chuck Cox, Susan Powell’s father, and three members of Josh Powell’s family that were listed as beneficiaries: his brothers Michael and John and his sister Alina.

Because Cox is his daughter’s conservator, he will receive about $529,000 plus 50 percent of the interest accrued, according to the judge’s order.

The estate of Michael Powell, who committed suicide in 2012, will receive about $492,000 plus 46.5 percent interest. Alina Powell will receive about $21,000 plus 2 percent interest and John Powell about $16,000 and 1.5 percent interested, according to the ruling.

The riders from New York Life covering Josh and Susan Powell’s two sons, Charlie and Braden, will also be split 50-50, giving Cox and Michael Powell’s estate about $264,000 each plus interest.

In his order, Judge Ronald Leighton ruled that Washington’s so-called “slayer statute,” which prevents a killer from benefiting from life insurance policies, does not extend to other members of Powell’s family.

Susan Powell went missing from her home in West Valley in 2009 and is presumed dead. Police suspect Josh Powell killed his wife, but he was never arrested or charged with her death or disappearance. Josh Powell later killed himself after murdering their two young sons.

Tom West, one of Alina and John Powell’s attorneys in Washington, called the judge’s ruling a “good and fair order.”

“We always thought that the Coxes and the Powells should, more or less, split the policies,” West said. “We have no intention of appealing that part of the order.”

The federal judge in Washington noted that because a missing person is not considered legally dead in Utah until after five years, Susan Powell will not legally be considered deceased until Dec. 6, 2014.

“Although presuming that Susan is alive may ultimately be legal fiction, it is a legal fiction that was purposely and intentionally created for situations just like this,” the judge ruled. “Accordingly, Susan is presumed to be alive and the insurance proceeds will be distributed accordingly.”

The third life insurance policy in question is Susan Powell’s $1 million policy from New York Life that lists Josh Powell as the primary benefactor and her and Josh Powell’s trust as the second beneficiary. With interest, the trust is now worth more than $2 million.

That trust, however, is still the subject of a court challenge in Utah. Currently, Cox is the sole benefactor of the trust and would receive 100 percent of the money. But Josh Powell’s mother, Teri Powell, and his sister, Alina Powell, contend they were illegally removed from the trust and are challenging the issue in court. West said they believe that money should also be split 50-50.

“One dollar is too much,” Bremner said. “There should be strong policies that say in cases like this, look at the equities of this to make sure that the right people benefit from this.”

Steven Powell, Josh Powell’s father who was recently released from prison after serving 30 months for taking voyeuristic pictures of two neighbor girls, will not be receiving any of the life insurance money in question. Bremner, who represented the girls in that case, told KIRO Radio last week the girls’ family had purchased Steven Powell’s former home and have a $2 million judgement against him.

The Associated Press contributed to this report