Nevada family-law case summaries

On Christmas Day 2003, Steven and Susan Maini, their two children, and Susan's parents were all killed when their small airplane, piloted by Susan's father, crashed at the North Las Vegas airport. Because everyone died at once, two family members ended up on opposite sides of a probate fight: Susan's brother, Paul Waldman, administered her estate, and Steven's brother, Michael Maini, administered Steven's estate. Two sets of assets were at stake: a 95-percent ownership interest in the family company, Maini Distributing, Inc. (MDI), and about $1.1 million in proceeds from two life insurance policies on Susan's life (a Prudential policy and a Jackson National Life policy). MDI had paid all the insurance premiums, Steven was the named beneficiary on both policies, and each policy said that if no beneficiary survived Susan, the money would go to her estate. The trial court decided that both the MDI ownership interest and the insurance money were "community property" - property that belongs equally to both spouses in a marriage - and split each in half between the two estates. The Nevada Supreme Court disagreed on two of the three main issues. First, the ownership of MDI. Steven's mother gave him 90 percent of the company during his marriage, and he inherited another 5 percent when she died. Although property acquired during marriage is usually presumed to be community property, the court explained that property received as a gift or inheritance is presumed to be the recipient's separate property. Waldman offered no evidence to overcome that presumption, so the court reversed and held the MDI interest was Steven's separate property, which goes to his estate. Second, MDI's claim to the insurance money. MDI argued that because it paid every premium, it should own the policies and collect the proceeds. The court held, for the first time in Nevada, that a corporation can in some situations gain an ownership interest in a life insurance policy through equitable devices called constructive trusts and resulting trusts - court-imposed arrangements that treat one person as holding property for the benefit of another. But those doctrines did not fit here: there was no fraud, no unjust enrichment, and no evidence that anyone intended the policies to benefit MDI (MDI was never named a beneficiary and never treated the policies as company assets). The court also held that even if a trust theory fit the facts, a Nevada statute, NRS 687B.040, requires a company to have an "insurable interest" in a person's life - a real economic stake in the person staying alive - before it can own insurance on that person. Susan was MDI's unpaid vice president and accountant, but the $1.1 million payout was far more than the cost of replacing her services, so MDI would have profited more from her death than her life. It therefore had no insurable interest, and the court affirmed the ruling that MDI gets none of the proceeds. Third, who gets the insurance money as between the two estates. Nevada's Uniform Simultaneous Death Act says that when an insured person and the policy's beneficiary die at the same time and there is no evidence about who died first, the law treats the insured as having survived the beneficiary. The trial court had ruled the Act did not apply and split the money as community property. The Supreme Court held the Act did apply, because neither Susan's will nor her insurance policies called for a distribution different from what the Act would produce. Under the Act, Susan is presumed to have outlived Steven, and that presumption carries all the way through to the final distribution of the money - even though the policies were bought with community funds. Because Steven died without a valid will, his community-property half of the proceeds passed to Susan under Nevada's intestacy rules, since she was presumed to have survived him. The result: all of the insurance proceeds belong to Susan's estate and should be distributed under her will, with Waldman as her ultimate residuary beneficiary.