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Judge asked to decide who gets $3.6M in Lincoln businessman’s life insurance payouts


A Lancaster County judge is being asked to settle a legal fight over what to do with $3.6 million in life insurance payouts to the trust of a Lincoln businessman who left millions more in outstanding bank loans allegedly obtained by fraud.

Following Aaron Marshbanks’ suicide in a downtown Lincoln parking garage on Nov. 2, 2022, bankers across the state began reporting that he had taken out millions in loans, allegedly based on financial statements misstating the value of his collateral provided by his investment advisor, Jesse Hill.







Marshbanks, Aaron

Marshbanks, Aaron


Within two days, the first of more than 20 creditors — banks, savings and loans and credit unions — started filing demands for notice of an application for informal probate of will and statements of claims.

At a hearing Friday, the question for County Court Judge Holly Parsley was where the money should go: to Marshbanks’ family or to his creditors.

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Omaha Attorney Amy Jorgensen, who represents the court-appointed special administrator, said there were six life insurance policies at issue, excerpts of which she offered into evidence, along with the trust agreement.

She said the proceeds from them aren’t exempt from claims of creditors.

“And the trust expressly mandates the trustee to pay the claims of creditors of the Marshbanks’ estate prior to any distribution to the beneficiaries under the trust,” Jorgensen said.

She pointed to three articles within the trust as support for her position.

Jorgensen said the undisputed facts show that the estate’s net assets total about $9.7 million and stipulated claims to date total about $34 million.

“The estate’s assets are insufficient to cover the payment of the estate’s stipulated claims and thus require the trustee to use the proceeds from the life insurance policies of $3.6 million to pay the estate’s stipulated claims,” she said.

On the other side, attorney William Lindsay Jr., who represents Marshbanks’ widow, Jennifer Marshbanks, the beneficiary of the trust, argued the life insurance proceeds should be exempt.

“We are asserting that this has not been expressly waived by the trust,” he said.

Lindsay argued that the special administrator was trying to put together three provisions of the trust, one of which didn’t even mention life insurance, to try to get the language there.

“Now we look at the cardinal rule of interpreting the trust: What is the intention?” the attorney said. “It’s for the benefit of his family. That’s the purpose of this.”

Lindsay said it was not for the benefit of the creditors.

In rebuttal, Jorgensen said that once the trustee accepted the life insurance proceeds, it’s mandated that the trustee must administer the proceeds in accordance with the trust.

She said the trust provides for the mandatory payments of the estate claims prior to the beneficiaries, and she noted that Marshbanks could have made it discretionary.

“But that’s not the case. It was mandatory payment of those claims,” Jorgensen said.

Parsley took the matter under advisement.

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