Oct. 23 – BEULAH – A judge has agreed to hold a second evidentiary hearing in a complex probate dispute over who should control a deceased woman’s trust, after a former administrator fails to challenge the embezzlement of funds and was imprisoned.

An Illinois man, Robert Ellis, was named trustee to the $550,000 estate of couple Benzonia, Beverly and Louis Markword in 2018, days before Louis died of a stroke.

Ellis, in her role, made repeated financial transactions that Beverly Markword and her adult son, Jim Markword, found suspicious. They contacted the police, Ellis was prosecuted in 2019 and ordered to pay $22,000 in restitution and serve 90 days in jail.

Ellis argued in court proceedings that there may have been accounting errors, but he had done nothing wrong, inheritance tax was arduous, and he charged a fair fee for his services.

The Markwords knew Ellis as the longtime boyfriend of their granddaughter, Christine de la Riva, who along with her sister, Debra Whiting, objected in court on Tuesday to Jim Markword succeeding Ellis as as Markword’s estate trustee.

“We don’t think he can be impartial,” Traverse City attorney Adam Shotwell, who represents the two sisters, said during a witness hearing.

The case was followed by Record-Eagle reporters as part of a special series on guardianship, guardianship and the laws governing trustees who serve vulnerable adults.

The Michigan Trust Code, passed in 2009, sets out the duties of a trustee, including filing annual accounts with the local probate court. A closer look at the deposits reveals possibilities for abuse.

Trustees are required to keep “adequate” records, segregate trust assets from their own, exercise authority “in good faith” and charge “reasonable” fees.

These terms are not well defined, and in Michigan, anyone over the age of 18 can serve as a trustee as long as they are “legally competent.”

Ellis, according to police records, used money from the Markword Trust to pay taxes on property he owned in Illinois; have new tires installed on his car; and make thousands of dollars in dodgy online purchases.

Ellis also withdrew $12,500 in cash from Beverly Markword’s personal checking account using ATMs, later telling a Benzie County Sheriff’s Detective it was to help the elderly woman qualify. for Medicaid.

The strategy, which according to the Michigan Trust Code can sometimes fall under the legal authority of a fiduciary, however, did not work, as Social Security and a pension put Beverly above the asset limit. $2,000, records show.

Benzie County probate judge John Mead said in the hearing Tuesday that Jim Markword was the logical choice for trustee in a case fraught with years of trouble.

“This court has a lot of experience on this issue and I’m telling you, on the face of it, you have quite an uphill battle,” Mead told Shotwell, regarding the sisters’ ongoing objection to the appointment of Jim Markword.

Beverly Markword died June 17; she lived in Frankfort Pines, an assisted living facility, after the sale of her Demerly Road farm. That sale was facilitated by Ellis in 2019 over family objections, according to police records.

Jim Markword did not attend Tuesday’s hearing, but his attorney, Adam Lett of Traverse City, said his client’s role as trustee was not intended to be objective, but rather to do what which was best for the estate, which no longer has any assets.

“The idea that he won’t be neutral is accurate,” Lett said. “He will provide for the benefit of the trust.”

That could include, Lett told Judge Mead, filing claims against Swogger and Bruce, the Traverse City law firm that documents show previously employed John Rizzo, an attorney who drafted the Markword trust documents.

Rizzo, in a separate 2019 Medicaid case, clashed with an administrative law judge, court records show, when a client purchased mausoleums from Trusted Burial Space LLC for $243,592 before applying for Medicaid benefits. .

The client’s claim was denied after Department of Health and Human Services examiners discovered that Rizzo held a stake in Trusted Burial Space.

“Because the funeral purchases were not arm’s length transactions and were in fact fictitious transactions, the value of these contracts is a book asset,” Administrative Judge Aaron McClintic ruled on May 17, 2019.

Rizzo did not return a previous request for comment.

Michael Swogger represented Ellis in previous Benzie County probate court hearings, records show.

Jim Markword, who lives in Florida, did not return a call seeking comment on Wednesday, although he previously said he was unhappy with the way Ellis handled his parents’ affairs.

Shotwell told Judge Mead that he submitted documents to the court from Honor Bank detailing questions his clients say they have about Jim Markword’s expenses.

Mead said he hasn’t read those bank documents yet because they were submitted the day before.

“I don’t allow ambush trials here,” Mead said.

Shotwell has 21 days to submit a written objection to Jim Markword’s nomination, Mead said, and then a second evidentiary hearing will be scheduled.

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