In Re Knickerbocker

912 P.2d 969 (1996)

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Nature of the Case

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Facts

P and Christine married on July 2, 1984. During their marriage, they purchased a life insurance policy in the amount of $ 325,000. The policy named Christine as owner, P as primary beneficiary, and Christine's two minor children from a previous marriage, Isaac and Abigail Jacobsen, as secondary beneficiaries. On July 22, 1991, Christine filed a divorce action against P. The trial court awarded her exclusive temporary use of the house that she owned in joint tenancy with P and issued a temporary restraining order prohibiting him from contacting her. The court issued another order prohibiting the parties from 'selling, encumbering or mortgaging' their assets. P left the state and did not return to Utah until after Christine's death on December 7, 1991. The divorce action was pending at that time. Christine learned that she was suffering from a potentially life-threatening disease, diagnosed after her death as malignant intravascular lymphomatosis, a rare blood disease. In an effort to preserve her assets for her children, she decided to establish an inter vivos trust for their benefit, execute a will naming them as her beneficiaries, and appoint her brother Cannon (D) as her attorney-in-fact. She executed (1) a declaration of trust and agreement establishing a trust for the benefit of her children and naming herself, D, and Elaine Cannon as trustees; (2) her last will and testament naming D as the personal representative of her estate; and (3) a durable power of attorney naming D as her attorney-in-fact. A few days before executing these documents but after the trial court had prohibited anyone from 'selling, encumbering or mortgaging' their assets, she executed a quitclaim deed 'as a Joint Tenant,' conveying to herself 'as a Tenant in Common' her interest in the house. The deed was promptly recorded. After establishing the trust, she executed a deed conveying her one-half interest in the house to the trustees. She transferred all her other assets to the trust and name the trustees as the primary beneficiaries of any life insurance policy which she held. She died on December 7, 1991. D sent Bay State Life Insurance Company one of the change-of-beneficiary documents which she had signed the day before she died. D filed a petition for formal probate. It was ultimately granted. P filed actions against D challenging the validity of the change-of-beneficiary document sent to Bay State Life, the durable power of attorney, the severance of the joint tenancy in the house, and the revocable trust agreement. The court found that the attempt to sever the joint tenancy in the house was legally ineffective because (1) Christine did not effectively convey the property to a third party, and (2) it violated the August 7, 1991, order prohibiting the parties from 'selling, encumbering or mortgaging' their assets. The court held that D successfully changed the designation of beneficiary on the insurance policy. Both parties appealed.