(CN) - A woman whose husband killed himself and their daughter cannot collect from a trust he funded with the proceeds of a settlement, the Georgia Court of Appeals ruled.
Nearly a decade before he married in 2004, Derek Morris and several members of his family had been in a car collision that killed his 11-year-old sister.
Derek eventually settled his civil claims over that accident and created a trust in Georgia to manage those funds.
By 2011, however, Derek had been living in North Carolina and was estranged from his wife, Sarah, who moved back to Georgia.
On Nov. 10 of that year, Sarah was unable to reach Derek or their 6-year-old daughter, Iza Lily. She drove to the family's home in North Carolina and found Derek and Iza Lily dead from gunshot wounds in the child's bedroom.
Sarah sued Derek's estate on behalf of Iza Lily for wrongful death and won a default judgment, but Derek's mother, Martha, as the sole surviving trustee of Derek's settlement funds, claimed that the trust money should go to Derek's siblings.
Finding that David actually died before Iza Lily, the trial court determined that the girl survived him and should be his beneficiary.
The Georgia Court of Appeals reversed last week, however, noting that the $300,000 in trust funds had passed to Martha as trustee and were not part of Derek's estate for probate purposes.
In so ruling, the court declined Sarah's attempt to apply North Carolina law.
"The trust was not a part of Derek's probate estate, and it was executed in Georgia where all the parties (including the trustor, trustee, and beneficiaries lived), and where the trust res has always been kept and managed," Presiding Judge Gary Blalock Andrews wrote for the court. "It follows that Georgia's relationship to the Trust is more significant than that of North Carolina, and that, consistent with Georgia public policy, Georgia law governs the meaning and effect of the provisions of the trust."
Sarah also failed to show that she could collect as a judgment creditor from the wrongful death case, the court found.
"Because Sarah did not have a judgment against Derek at the time of his death, she was not then his 'creditor' pursuant to the statute strictly construed," Andrews wrote.
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