Cheryl McKnight - Page 8

                                        - 8 -                                         
               In December of 1997, John filed for divorce from petitioner            
          so that he could marry another woman.  On October 16, 1998,                 
          petitioner and John’s divorce became final.                                 
               As of the time of the divorce, John had borrowed against all           
          of the equity in the Castle Rock home and had spent or consumed             
          all of the loan proceeds along with most other marital assets.              
               In the divorce, the $80,000 deferred annuity relating to               
          John’s accident was split into two $40,000 deferred annuities,              
          one of which petitioner received, and John received the other.1             
          Petitioner also received possession of a used car, which car                
          John, contrary to the divorce decree, never transferred into                
          petitioner’s name.                                                          
               With regard to petitioner and John’s 1995 joint Federal                
          income taxes, the divorce decree stated:  “[John] shall be solely           
          responsible for payment of all such taxes, including all interest           
          and penalties...and * * * [John] shall indemnify and hold * * *             
          [petitioner] harmless therefrom.”                                           
               In December of 1998, John remarried and moved to Tennessee.            
          Two weeks later, on January 4, 1999, John was found dead.  John             
          died intestate.                                                             
               On November 27, 2000, Overton, John’s first wife, petitioned           
          the Chancery Court of Bedford County, Tennessee, to allow her to            

               1  As of the trial herein, petitioner had received total               
          installment payments of $30,000 on the $40,000 annuity.  The                
          remaining $10,000 is scheduled to be paid to petitioner in 2006.            

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