IN RE: the Marriage of Carol J. Hitzfield (2025)

MEMORANDUM DECISION

Case Summary

[1] Carol J. Hitzfield (“Wife”) petitioned to dissolve her marriage to Albert L. Hitzfield (“Husband”). Wife sought to include in the marital estate 273 acres (“the Property”) that Husband had transferred to an irrevocable legacy trust (“the Trust”) during the marriage without her knowledge. The trial court denied Wife's claim. After Wife filed her dissolution petition, she liquidated a Charles Schwab account (“the Account”) and used the funds to purchase a home. In an interlocutory order, the trial court stated that it would include the value of the Account in the marital estate and assign it to Wife, but it did not do so in the dissolution decree.

[2] Wife now appeals, arguing that the trial court erred in excluding the Property from the marital estate. Husband cross-appeals, arguing that the trial court erred in failing to include the value of the Account in the marital estate. We agree with both arguments, so we reverse and remand for further proceedings.

Issues

[3] Wife raises several issues on appeal, one of which is dispositive: whether Husband's transfer of the Property to the Trust is void because he failed to provide her with a copy of a legacy trust affidavit as required by statute. Husband raises one issue on cross-appeal: whether the trial court erred in failing to include the value of the Account in the marital estate.

Facts and Procedural History

[4] The relevant facts are undisputed. Wife was born in 1945, and Husband was born in 1936. They were married in 1989. Wife had two children from a prior marriage. Husband had three children, one of whom later died, leaving a surviving spouse and two children. Husband was the owner of a successful excavating company, and Wife kept the company's books. The couple also owned and operated a bison farm, which was in Wife's name and for which she performed administrative duties.

[5] On November 20, 2020, without Wife's knowledge, Husband executed an instrument creating the Trust, designated as the A. Larry Hitzfield Irrevocable Trust, into which he transferred 273 acres located in Allen County that had been purchased by the parties in 2006, were used to graze bison, and were titled in Husband's name.¹ The Trust instrument names one of Husband's grandsons as trustee and allows him to graze bison on the Property. The instrument directs the trustee to pay income from the Trust estate to Husband and Wife during their lives and to Husband's descendants after their deaths, and to distribute the Property to Husband's descendants ten years thereafter. Husband intentionally made “no provision” for Wife's children or descendants. Appellant's App. Vol. 2 at 65. The instrument states that Husband intended for the trust “to be established as a Legacy Trust as provided for under Indiana Code 30-4-8” and for the “Trust and the dispositions under it ․ to be construed, regulated, and governed as to administration and as to validity and effect by the laws of the State of Indiana[.]” Id. at 64, 72. The instrument further states that Husband has no “right or power to alter, amend, revoke, or terminate” the Trust and that the trustee has no power to distribute principal to Husband or Wife for their benefit under any circumstances. Id. at 64 (bold and capitalization removed). The transfer of the Property was recorded on December 7, 2020.

[6] According to Wife's affidavit, “[u]pon receiving the real estate tax bill the following spring, [she] noticed that it was an unusually low tax assessment.” Appellant's App. Vol. 3 at 28. Husband told her not to “worry about it.” Id. Wife “inquired with the Allen County Treasurer's Office and learned that title to one or more [tracts] of land may have been transferred out of [Husband's] name.” Id. “On or about November 28, 2021, [Wife] discovered a copy of [Husband's] Trust agreement under clothing in his dresser drawer. It was then that [Wife] realized that [Husband] may have transferred real estate to a trust benefiting his relatives to the exclusion of [hers].” Id. Wife also discovered a legacy trust affidavit that Husband had failed to provide her a copy of as required by statute. See Appellant's App. Vol. 5 at 89-90 (Wife's deposition).

[7] On July 13, 2022, Wife filed a petition to dissolve the marriage, which she later amended. Later that month, the trial court issued an order enjoining the parties from “encumbering, concealing, selling or otherwise disposing of any” marital assets. Appellee's App. Vol. 2 at 2. In October 2023, Husband filed a citation for contempt asserting that Wife had violated the court's order by withdrawing $94,970 from the Account to purchase a home. After a hearing, the trial court issued an order finding that Wife had liquidated the Account without permission and noting that “Wife [was] agreeable to having the value [of the Account] assigned to her on the Marital Balance Sheet.” Id. at 9. The court declined to find Wife in contempt but ruled that the value of the Account “shall be assigned to Wife at the final hearing.” Id.

[8] In November 2023, Husband filed a motion for partial summary judgment, in which he argued that the Property should be excluded from the marital estate because “[t]he marital estate has no legal title to or equitable interest in the real estate held by the Trust and the parties have only the interest of income beneficiaries of the Trust.” Appellant's App. Vol. 2 at 43. Wife filed a response and her own motion for partial summary judgment, in which she argued, among other things, that the Property should be included in the marital estate because Husband had failed to provide her with a copy of a legacy trust affidavit as required by statute. In February 2024, the trial court denied both motions, finding that genuine issues of material fact existed with respect to the issues raised by the parties.

[9] In June 2024, Wife filed a second motion for partial summary judgment, in which she renewed the arguments that she had made in her prior motion. Husband filed his own summary judgment motion, and both parties filed responses. On August 30, 2024, the trial court issued an order denying Wife's motion and granting Husband's motion. Wife filed a motion for entry of final judgment or, alternatively, certification of the court's order for interlocutory appeal, which the court denied.

[10] The trial court held the final hearing in February 2025. In its dissolution decree, the court made the following findings regarding the Trust:

4.18 ․ The Court previously denied Wife's claims to set aside the [Trust] on summary judgment pursuant to the August 30, 2024 Order. The Court cannot award property which is not owned by the parties. Wife has litigated, unsuccessfully, her claims to void the transfers to the Trust, to disqualify the Trust and to otherwise bring into the marital estate the assets within the Trust. Those claims were resolved against her as a matter of law in the Court's Order of August 30, 2024.

4.19 Further, the evidence presented at trial reaffirms the Court's August 30, 2024 Order. Husband transferred the real estate to the Trust well before the date of filing. Husband and Wife remained income beneficiaries of the Trust. However, no income payments have been paid by the Trust since it was created. The parties do not dispute that Husband has no control over the Trust and any beneficiary payments would be determined by the Trustee. The Court finds and concludes the Trust corpus is not a marital asset subject to division as there is no ongoing benefit to the parties beyond income payments from the Trust as beneficiaries. Husband has no present pecuniary interest in the Trust corpus and it is not a marital asset. The Court finds and concludes that as income beneficiaries of the Trust, the income derived from the Trust is a marital asset subject to division, but the Trust Corpus is not a marital asset.

4.20 The Court assigns zero value to Husband's and Wife's beneficiary interest in the Trust. To the extent any payments are paid from the Trust, those payments shall be split equally between Husband and Wife as contemplated by the Trust.

Appealed Order at 7-8 (citations omitted).

[11] Nevertheless, the court also found that Husband had dissipated the marital estate by transferring the Property, which had an estimated value of over two and a half million dollars, “to an irrevocable trust outside of Wife's control and removing it from the marital estate.” Id. at 13. The court used the dissipation as “further support” for its “determination that a deviation from an equal division of the marital estate is appropriate in this case.” Id. The court awarded sixty percent to Wife and forty percent to Husband and ordered Husband to “pay to Wife the sum of $502,747.46 by way of property equalization judgment between the parties.” Id. The court did not include the value of the Account in the marital estate. Wife now appeals, and Husband cross-appeals.

Discussion and Decision

Wife's Appeal

[12] Because it is dispositive of the other arguments that Wife raises, the only argument that we address is whether Husband's transfer of the Property to the Trust is void because he failed to provide her with a copy of a legacy trust affidavit as required by statute. Legacy trusts are governed by Indiana Code Chapter 30-4-8 (“the Legacy Trust Act”), which was enacted in 2019 and applies to “qualified dispositions[² ] to legacy trusts[.]” Ind. Code § 30-4-8-1(a)(1). According to Indiana Code Section 30-4-8-2(6), “ ‘[l]egacy trust’ means an irrevocable trust established under section 3 of this chapter.” Indiana Code Section 30-4-8-3 provides,

A legacy trust is established by:

(1) designating in writing in the trust that the trust is a legacy trust established under this chapter;

(2) including the terms required by section 4 of this chapter in the legacy trust;[3] and

(3) delivering a qualified affidavit[4] containing the statements required by section 5 of this chapterto the qualified trustee.[5]

[13] Indiana Code Section 30-4-8-5 provides,

(a) A qualified affidavit must be signed under the penalties of perjury, and state the following:

(1) That the transferor has full right, title, and authority to transfer the property to the legacy trust.

(2) That the transfer of the property to the legacy trust will not render the transferor insolvent.

(3) That the transferor does not intend to defraud a creditor by transferring the property to the legacy trust.

(4) That there are no pending or threatened court actions against the transferor other than the court actions identified by the transferor and attached to the qualified affidavit.

(5) That the transferor is not involved in any administrative proceedings other than the administrative proceedings identified by the transferor and attached to the qualified affidavit.

(6) That the transferor does not contemplate filing for relief under the federal bankruptcy code.

(7) That the property transferred to the legacy trust is not derived from unlawful activities.

(b) Except as provided in subsection (c), a qualified affidavit must be signed by the transferor.

(c) In the case of a disposition by a transferor who is a trustee, the qualified affidavit must be signed by the transferor who made the original disposition to the trustee. A qualified affidavit signed under this subsection must state the facts as of the time of the original disposition.

(d) If a transferor is a married individual at the time a qualified affidavit is signed, the transferor shall provide a copy of the qualified affidavit to the transferor's spouse.

(Emphasis added.)

[14] It is undisputed that Husband did not provide a copy of the qualified affidavit to Wife, who found the original affidavit and a copy of the Trust instrument in his dresser drawer in November 2021, approximately one year after the instrument was executed and eight months before she petitioned to dissolve the marriage. In its August 2024 order denying Wife's second motion for partial summary judgment and granting Husband's second motion for partial summary judgment, the trial court concluded that providing a copy of a qualified affidavit to the transferor's spouse is not a “requirement[ ] for the establishment of a legacy trust.” Appellant's App. Vol. 6 at 28.

[15] Wife now challenges that ruling. Where, as here, “the facts are undisputed and the issue presented is a pure question of law, we review the matter de novo.” Bellows v. Bd. of Comm'rs of Elkhart Cnty., 926 N.E.2d 96, 114 (Ind. Ct. App. 2010). “[S]tatutory interpretation presents a pure question of law for which summary judgment is ․ particularly appropriate.” HLH Consulting, LLC v. Burd Auto., Inc., 146 N.E.3d 1051, 1057 (Ind. Ct. App. 2020). The party appealing from a summary judgment ruling has the burden of persuading us that the ruling was erroneous. Bellows, 926 N.E.2d at 114.

[16] “In construing a statute, our primary goal is to determine and effectuate the legislative intent.” M.S. v. C.S., 938 N.E.2d 278, 282 (Ind. Ct. App. 2010). “To discern that intent, we give effect to the plain meaning of the statute's words.” Rogers v. Martin, 63 N.E.3d 316, 327 (Ind. 2016). “When those words are clear and unambiguous, we simply apply their plain meaning, without resorting to other canons of statutory construction.” Id. “[S]tatutes concerning the same subject matter must be read together in an attempt to harmonize and give effect to each.” Peoples State Bank v. Benton Twp. of Monroe Cnty., 28 N.E.3d 317, 323 (Ind. Ct. App. 2015). We presume that our legislature does not enact useless statutes and intends to avoid unjust or absurd results. Whitesitt v. Town of Knightstown, 998 N.E.2d 729, 732 (Ind. Ct. App. 2013).

[17] Wife points out that the word “shall,” as used in Section 30-4-8-5(d), “generally is a mandatory term.” Manley v. Zoeller, 77 N.E.3d 1227, 1231 (Ind. Ct. App. 2017). She further asserts that, when Section 30-4-8-5 “is read as a whole, it is apparent married transferors must provide a copy of the legacy trust affidavit to their non-transferring spouse before they make a qualified disposition.” Appellant's Br. at 44.⁶

[18] In response, Husband argues that “[i]f the legislature intended the Section 5(d) instruction to be essential to the creation of a legacy trust it might easily have included it in Section 30-4-8-3 which sets forth the requirements to establish a legacy trust. It did not.” Appellee's Br. at 38. We do not find this argument persuasive. Not all legacy trusts are created by married transferors, and thus it is unsurprising that the legislature would not include “the Section 5(d) instruction” in Section 30-4-8-3.

[19] Considered as a whole, Section 30-4-8-5 clearly evinces the legislature's intent that legacy trusts not be used to transfer property out of the reach of existing and potential creditors, including spouses. Indiana Code Section 31-15-7-4(a) states that in a marital dissolution action, the court “shall divide the property of the parties,” whether owned by either spouse before the marriage or acquired by either spouse in his or her own right after the marriage and before final separation. Thus, any property to which a married transferor would have “full right, title, and authority” to transfer to a legacy trust per Section 30-4-8-5(a)(1) would also, in the abstract, be subject to division with the transferor's spouse in a marital dissolution action.⁷

[20] We must presume that Section 30-4-8-5(d) is not a useless provision and that the legislature did not intend for a violation thereof to be free from consequences. To be sure, Section 30-4-8-5(d) does not specify a deadline for furnishing a copy of an affidavit to a transferor's spouse, but the provision would be superfluous if the deadline were any time after the delivery of the affidavit to the trustee. Given the legislature's obvious concern with ensuring that a legacy trust disposition is honest and aboveboard, we must conclude that the legislature intended for a married transferor to provide a copy of the affidavit to his or her spouse within a reasonable time after the transferor signs the affidavit and before the transferor delivers the affidavit to the trustee; this would ensure that the spouse has a reasonable opportunity to review the document and either object to or seek to enjoin the disposition without having to file an onerous post facto fraudulent-transfer claim under Section 30-4-8-8.⁸ See Med. Assurance of Ind. v. McCarty, 808 N.E.2d 737, 741 (Ind. Ct. App. 2004) (stating that courts construe statutes “in such a way as to prevent absurdity and hardship and to favor public convenience”). To effectuate this legislative intent, we can only conclude that a transferor's failure to comply with Section 30-4-8-5(d) must result in the invalidation of a disposition as void ab initio.

[21] Based on the foregoing, we hold that Husband's disposition of the Property is void and thus the Property must be included in the marital estate. Consequently, we reverse the trial court's summary judgment ruling and dissolution decree and remand with instructions to include the Property in the marital estate and divide the estate in accordance with applicable law. In light of our holding, we do not address Wife's argument that the trial court abused its discretion in dividing the marital estate.

Husband's Cross-Appeal

[22] On cross-appeal, Husband argues that the trial court erred in failing to assign the value of the Account to Wife in the dissolution decree, contrary to its stated intention in a December 2023 order. Appellee's App. Vol. 2 at 9. We agree with Husband that this was likely due to an oversight, so we remand with instructions to include the value of the Account in the marital estate as one of Wife's assets.⁹

Conclusion

[23] We reverse and remand with instructions to include both the Property and the value of the Account in the marital estate and divide the estate in accordance with applicable law.

[24] Reversed and remanded.

FOOTNOTES

1.   Wife states, and Husband does not dispute, that “[t]he property was the subject of a like-kind exchange under 26 U.S.C. § 1031 and was thus conveyed to [Husband] through an intermediary entity, Hitzfield Exchange AT, LLC.” Appellant's Br. at 13.

2.   “ ‘Qualified disposition’ means a disposition by a transferor to a legacy trust.” Ind. Code § 30-4-8-2(11). “ ‘Disposition’ means[, among other things,] the exercise of a power that causes a transfer of property to a trustee.” I.C. § 30-4-8-2(4). “ ‘Transferor’ means a person who as ․ an owner of property ․ directly or indirectly makes a disposition or causes a disposition to be made.” I.C. § 30-4-8-2(13).

3.   Indiana Code Section 30-4-8-4 provides,A legacy trust must do the following:(1) Provide for the appointment of at least one (1) qualified trustee for the property that is the subject of a qualified disposition.(2) Expressly incorporate Indiana law to govern the validity, construction, and administration of the trust.(3) Be irrevocable.(4) Provide that the interests of the transferor or beneficiary in the trust property or the income from the trust property may not voluntarily or involuntarily be transferred, assigned, pledged, or mortgaged before the qualified trustee actually distributes the property or income to the beneficiary.

4.   “ ‘Qualified affidavit’ means a sworn affidavit executed under” Indiana Code Section 30-4-8-5. Ind. Code § 30-4-8-2(10).

5.   “ ‘Qualified trustee’ means a person qualified to serve as the trustee of a legacy trust under” Indiana Code Section 30-4-8-6. I.C. § 30-4-8-2(12). Those qualifications are not pertinent here.

6.   Wife asserts that Section 30-4-8-5 is entitled “Qualified affidavit – Requirements” and that “[i]t is well settled that this Court may look to the titles of statutes in interpreting their meaning.” Appellant's Br. at 42 (emphasis in Wife's brief) (citing Ind. State Highway Comm'n v. Bates & Rogers Constr., Inc., 448 N.E.2d 321, 324 (Ind. Ct. App. 1983)). We observe that the statutory title quoted by Wife appears in Burns Indiana Statutes Annotated, whereas West's Annotated Indiana Code uses the title “Statement; signature.” As originally enacted by the General Assembly, Section 30-4-8-5 was simply entitled “Qualified affidavits.” Indiana General Assembly, 2019 Session Laws, https://iga.in.gov/laws/2019/ic/titles/30#30-4-8 [https://perma.cc/2BPW-UNWS]. In Indiana Code Section 1-1-1-5(f), which was last amended in 1991, the General Assembly stated,The headings of titles, articles, and chapters as they appear in the Indiana Code, as originally enacted or added by amendment, are not part of the law and may be altered by the lawful compilers, in any official publication, to more clearly indicate content. These descriptive headings are intended for organizational purposes only and are not intended to affect the meaning, application or construction of the statute they precede.(Emphasis added.) Given the above, it would appear that this provision has been applied in practice to the headings of individual statutes as well. Therefore, we decline Wife's invitation to look to one compiler's titling of Section 30-4-8-5 in interpreting the statute's meaning.

7.   We express no opinion regarding the merits of Wife's argument that Section 30-4-8-8(a)(3) “requires assets transferred to a legacy trust during marriage to be divided upon dissolution.” Appellant's Br. at 26.

8.   See I.C. § 30-4-8-8(a)(1) (stating in pertinent part that “a claim against property that is the subject of a qualified disposition to a legacy trust is barred by [Section 30-4-8-7] unless the claim is[, among other things,] an action brought in Indiana under the Uniform Fraudulent Transfer Act (IC 32-18-2) in which the requirements for recovery under the act are met by clear and convincing evidence[,]” as opposed to Section 32-18-2-14(c)’s less stringent preponderance-of-the-evidence standard). Broadly speaking, the limitation period for asserting a claim under Section 30-4-8-8(a)(1) is only two years, I.C. § 30-4-8-8(b), whereas the limitation period for asserting a claim under Chapter 32-18-2 is four years. I.C. § 32-18-2-19. Wife raised a fraudulent-transfer claim in her amended dissolution petition, and the trial court ruled that the claim was untimely. We need not address Wife's argument that this ruling is erroneous.

9.   Wife states that Husband omitted the account from his proposed marital balance sheet and thus “invited any error in excluding the account.” Appellant's Reply Br. at 25. We disagree. “[I]nvited error is established where there is evidence that the error resulted from the [party's] affirmative actions as part of a deliberate and well-informed trial strategy and not simply a passive lack of objection or oversight.” Ward v. State, 203 N.E.3d 524, 531 (Ind. Ct. App. 2023) (citing Batchelor v. State, 119 N.E.3d 550, 558 (Ind. 2019)). Just as the trial court's omission was an oversight, so, too, was Husband's. We also reject Wife's claim of waiver and her argument that the account was not a marital asset, because, as the December 2023 order states, she was “agreeable to having the value of the account[ ] assigned to her on the Marital Balance Sheet.” Appellee's App. Vol. 2 at 9.

Bailey, Judge.

Tavitas, J., and Kenworthy, J., concur.