Family of reclusive millionaire will collect nearly $1.6 million estate in last-minute settlement

In 2016, Blanche Berenzweig collected a $1.6 million inheritance from the estate of LeRoy Ern, a client with dementia who lived the life of a hermit.

After months of fighting over the cash, Ern's family is getting nearly all his money, according to a settlement reached just before the case was to go to trial Monday.

"They were not going to get anything," said Kevin Demet, who represents 11 of Ern's 12 nieces and nephews. "So that's a big win."

Berenzweig, whose insurance license was revoked in June by State Insurance Commissioner Ted Nickel, will only keep up to $150,000, basically to cover her attorney fees and associated costs, according to Demet and Michael Ganzer, Berenzweig's lawyer.

Ern died of advanced dementia in 2016 at the age of 92. He left everything to Berenzweig, then a financial adviser living in Mequon and the Las Vegas area.

Ern had little contact with relatives and lived in a modest home on the 4600 block of North Parkway Avenue. The house was a fire trap and had no working furnace. It was full of piles of newspaper, junk and food, according to testimony in a 2017 hearing over the fate of Berenzweig's insurance license.

In his final years, Ern developed a friendship with Berenzweig, who had once sold him an annuity. Ern, a retired factory worker, would occasionally visit Berenzweig at her Mequon office to talk about a variety of subjects, such as history and world events, records show.

It wasn't long before Berenzweig became Ern's power of attorney for health and medical issues, the sole beneficiary of two annuities, and executor and sole beneficiary of his estate. She even arranged his private funeral and cremation. 

One month after Ern's death, Berenzweig collected $276,648 from one annuity and the following month received $734,467 from a second policy, state records show. 

Ern's nieces and nephews objected to the will in Milwaukee County Circuit Court, charging that Berenzweig illegally pressured Ern into making her the sole beneficiary.

State regulators in June ordered her to give the annuity money to the estate, and the trial that was scheduled for this week was to determine whether Berenzweig or the family members would collect the $1.6 million estate. Family members asked that the court void the will that made Berenzweig the sole beneficiary.

"In 2009 and 2010, (Berenzweig) took advantage of an isolated, elderly customer," Rachel Pings, an administrative law judge, wrote when she recommended in March that regulators order Berenzweig pay the annuity money to the Ern estate. "She profited illegally by more than $1 million." 

Aggressive court examination planned

Ganzer said Berenzweig's deteriorating health prompted the settlement talks. Berenzweig was expected to testify for at least a full day. 

"It became evident ... that she could not handle a full trial," Ganzer said. "She wanted to be back to square one."

Demet said his cross-examination of Berenzweig would likely have been aggressive, noting she had not turned over all of the documents he demanded and has provided conflicting information. 

Demet said serious settlement talks began Sunday morning and finished that evening. The family's lawyers will receive a 40% contingency fee, plus expenses, court records show.

Demet said had the matter gone to trial, the relatives could have sought additional money by claiming Berenzweig acted in bad faith. If the relatives had won on that count, Berenzweig could have been ordered to pay the family's fees and expenses, Demet said.

But going to trial also carries considerable risk because in this type of probate case, the judge gives one side or the other the entire estate. 

It's "all or nothing," Demet said. "So either they get everything or they get nothing."

Unlike many probate cases where close family members fight over the estate of a loved one, this matter was different because Ern had long lived the life of a recluse, seldom seeing any family members or friends.

"For anybody that ends up with LeRoy's money, there is somewhat of a windfall," Demet said. "Nobody was really close to the guy."

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Family of reclusive millionaire will collect nearly $1.6 million estate in last-minute settlement