Steve Downing, one of two attorneys representing Susan's parents, said Chuck and Judy Cox plan to file their own probate action in state court and will support the insurer's request for a District Court review.
"Clearly, under any law, he didn't have the right to change the beneficiaries," Downing said.
West Valley City Police have said on two occasions they were unaware of any insurance policy in Susan's name. In February, when asked about a $1 million policy in Susan's name, West Valley City Police Chief Thayle "Buzz" Nielsen said, "I don't know that, I hadn't heard that." The department's spokesman said the same thing in January 2009 as it began investigating what happened to Susan.
Downing said Chuck Cox spoke with police about the policies shortly after his daughter disappeared. "And if they didn't know about it, that is one of the first things you ask about, especially when a spouse goes missing," he said.
West Valley Police spokesman Sgt. Mike Powell declined to discuss whether investigators evaluated the policies as a possible motive for Susan's disappearance. Powell said only that his department would not "address any questions or issues in regard to that particular civil matter and leave that to the courts and respective attorneys to comment on."
According to court documents, Powell and his wife took out insurance policies in the summer of 2007, a little more than two years before Susan disappeared from their West Valley City home. Powell had a five-year term life insurance policy worth $1 million; he also had riders worth $250,000 on each of their sons. Susan had a $500,000 five-year term policy and a $500,000 rider.
Susan initially was listed at the sole beneficiary of her husband's policy. The couple were equal beneficiaries of the policies for their sons, Charlie and Braden.
In February 2009, 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 family trust, Powell's brother Michael and Susan's father were listed as joint trustees of the estate in the event the couple declined or were unable to administer it.
Powell continued making monthly premium payments on the policies after moving to Washington, according to the court filing.
Powell altered his policy again on Oct. 3, 2011, removing Susan as the primary beneficiary a modification that came seven business days after his father Steve Powell's arrest for voyeurism and possession of child pornography and three days after a Washington judge temporarily placed Charlie and Braden with the Coxes. He also dropped the family trust as a beneficiary.
Instead, Powell named his brother Michael and sister Alina as his primary beneficiaries and his brother John as the secondary beneficiary. He also listed himself, his brother Michael and his sister Alina as primary beneficiaries on his sons' policies.
Two months later, Powell made yet another change to his policy. He divided the policy's proceeds between his three siblings, with a 93 percent share to his brother Michael, 4 percent to his sister Alina and 3 percent to his brother John. In the event his brother Michael was not living, 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, Powell listed himself as the beneficiary of his sons' policies, with his brother Michael the secondary beneficiary.
Michael Powell and Alina Powell both contacted New York Life Insurance on Feb. 14 to request forms to make claims on their brother's and nephews' life insurance policies.
"They were trying to apply for proceeds the day we had the controversy over where Josh was going to be buried," Downing said.
In its March 2 court filing, the insurer said it is "uncertain" who should be considered the rightful owners and proper recipients of the potential payout of $2.5 million plus interest on the policies. That uncertainty begins with Powell's role in his children's deaths, the insurer notes in its court filing and his status as a "person of interest" in his wife's disappearance.
"If Joshua Powell is considered a slayer within the meaning of [Washington law], he is clearly not entitled to the proceeds of either the children's riders or Susan Powell's insurance policy," the filing states.
On Feb. 5, Powell spread gasoline throughout his home in Graham, Wash., and then locked out a case worker who'd come to supervise a visit with his sons. Powell struck Charlie, 7, and Braden, 5, in the head with a hatchet and then set fire to the home, killing himself and his sons. In a statement days later, the Pierce County prosecutor said he considered Powell's acts an admission of guilt in Susan's death.
New York Life said it is less clear how to handle beneficiary designations Powell made before his death, noting it has a "bona fide fear that such a distribution to Joshua Powell's siblings and father would invite multiple and vexatious litigation from" multiple parties. Those parties include his estranged sister Jennifer Graves; his mother, Terri Powell; the Coxes; and the couple's trust.
It also notes that because Washington is a community property state meaning that a lawful spouse may have a vested interest in shared assets Josh Powell was barred from "giving away" the proceeds of the policies without his wife's express or implied consent. Instead, the insurance proceeds may be payable to the couple's trust, the filing states.