Dudek v. Dudek

In the Probate Litigation area, we recently had a published decision in the case of Dudek v. Dudek (2019) 34 CA5th 154.  Here is the case summary:

Our client’s brother, J.D. Dudek, (the decedent) established an irrevocable trust for the purpose of transferring ownership of an existing $1 million life insurance policy to the trust for the benefit of our client.  The trust specifically referred to the policy and the decedent sent in the paperwork to the insurance company to have the ownership of the policy changed to our client as trustee of the trust.

The insurance company rejected the change of ownership because there were handwritten alterations that had not been initialed.  The decedent did not resubmit the change of ownership forms, but prior to his death the decedent named his wife and others as beneficiaries of the $1 million policy.  Following his death, our client petitioned the court to have the beneficiaries who received the death benefits pay those funds over to the irrevocable life insurance trust.

The trial court sustained the demurrer of the beneficiaries who received the death benefit, based on its ruling that since the insurance company complied with the terms of the beneficiary designation that the insurance company had accepted, that our clients did not have the right to recover the proceeds.

The Court of Appeal reversed the trial court, finding that if our client could establish the facts alleged in the Petition, then it would be clear that the decedent created an irrevocable trust, and properly funded it, by having established the trust. “If the Trust was created, then David’s entitlement to the proceeds of the life insurance policy that was an asset of the Trust would be established, and he would be able to seek the court’s assistance in having those proceeds conveyed to him in his capacity as trustee.

The trial court therefore should not have sustained the respondents’ demurrer to David’s Petition.” Following the Court of Appeal decision, the beneficiaries sought review before the California Supreme Court; however their petition was denied

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