DeWayne Krom, Appellant-Respondent v. Sarah Krom, Appellee-Petitioner (2025)

MEMORANDUM DECISION

Case Summary

[1] Dewayne Krom (“Husband”) appeals the trial court's order valuating and dividing the marital estate following the dissolution of his marriage to Sarah Krom (“Wife”). We affirm in part, reverse in part, and remand with instructions.

Issues

[2] Husband raises four issues for our review, namely:

1. Whether the trial court erred when it determined that monies Husband had received from his mother were gifts instead of loans.

2. Whether the court erred when it included property owned by a trust in the marital estate.

3. Whether the court clearly erred when it valued savings bonds owned by Wife at zero dollars.

4. Whether the court abused its discretion when it awarded Wife attorney's fees.

Facts and Procedural History

[3] Husband and Wife were married on March 23, 2002. During the course of their marriage, Husband and Wife had four children. Husband worked and provided for the family financially. Wife was a stay-at-home mother who raised the children and managed the home.

[4] On February 26, 2003, Husband's parents Russell and Marie Krom (hereinafter, “Russell” and “Marie”) created a revocable living trust called the Krom Family Trust (“the Trust”) into which they placed a substantial amount of farmland. Pursuant to the Trust, Russell and Marie were both trustees and grantors of the Trust. So long as Russell and Marie were both alive, they, as grantors, would receive all of the net income from the trust estate. However, upon the death of the first grantor to die, the Trust would be divided into two equal shares and fund two separate trusts. For the first share, known as Krom Family Trust Number One (“Trust One”), the surviving spouse would continue to be the trustee and sole beneficiary. Trust One would remain revocable until the time of the surviving spouse's death. See Ex. Vol. 3 at 8-9.

[5] The second share, known as Krom Family Trust Number Two (“Trust Two”), would be managed by a successor trustee, with the surviving spouse being the sole beneficiary. Trust Two would become irrevocable upon the death of the first spouse and, upon the death of the surviving spouse, would be distributed in equal shares to Husband and his two siblings. Husband was named as the first-choice successor trustee for Trust Two.

[6] In 2004, Husband and Russell started a business called Krom Farms Repair & Restoration (“Krom Farms”). Krom Farms was a family-operated farming business that also repaired farming equipment. Husband and Russell took out a loan in the amount of $660,000.00 (the “Master Note”) to operate Krom Farms. Husband and Russell used land owned by the Trust as collateral for the Master Note. Krom Farms did not own any land but farmed land owned by the Trust and made improvements to that land. While Husband and Russell each owned half of the business, Husband managed its operations.

[7] Russell and Marie amended the Trust on January 26, 2011, and provided that, upon the death of the surviving spouse, any of their ownership shares in Krom Farms shall be distributed to Husband, with the remainder of Trusts One and Two divided equally between Husband and his siblings. See id. at 17.

[8] In 2016, Husband and Wife purchased a Your Parts auto parts store, which Husband ran. Husband and Wife took out a business loan in the amount of $250,000 and a personal loan in the amount of $90,000 from First Farmers Bank & Trust (“First Farmers”). While the parties were married, Your Parts was a successful business that made money.

[9] In 2019, Krom Farms began experiencing financial difficulties. As a result, Marie sold some of the real estate owned by the Trust and wrote a check to Krom Farms in the amount of $350,000, which Husband applied to Krom Farms’ debt.

[10] On April 1, 2020, Wife filed a petition to dissolve her marriage to Husband. Thereafter, in June and August, Husband and Wife entered into two agreed provisional orders regarding child custody and child support. Ultimately, on March 18, 2021, Husband and Wife entered a final agreement on custody, parenting time, and child support. That same day, the trial court accepted the parties’ agreement and entered a decree dissolving the marriage. The court then ordered that certain issues, including those related to the division of the marital estate, “are to be addressed at a further hearing.” Appellant's App. Vol. 2 at 70.

[11] On August 24, 2021, more than sixteen months after Wife filed her petition and five months after the court entered its order dissolving the marriage, Russell died. In 2021 or 2022, First Farmers initiated a foreclosure action against Your Parts. After the assets were liquidated, the loan due to First Farmers had a balance of over $227,000. Husband and Wife reached a settlement agreement with First Farmers, pursuant to which they agreed to pay First Farmers $120,000 within five days in exchange for dismissal of the foreclosure action. Marie provided $120,000 to Husband, which he used to pay the amount due to First Farmers.

[12] Over the next several years, both parties filed various contempt filings against the other. On January 24, 2024, they entered into a mediated agreement regarding the value of certain assets and liabilities. The trial court accepted that agreement. On November 18, the parties filed another agreement to resolve pending issues related to the contempt filings and other child custody and support issues but specifically noted that the division of the marital estate was “not resolved” by the agreement. Id. at 93.

[13] The court held a fact-finding hearing on the outstanding issues of property valuation and distribution on January 31, 2025. During the hearing, Wife acknowledged that she had savings bonds that she had received from her grandparents but asked that the court value them at zero dollars because she had received them when she was a child. She further testified that the dissolution proceedings had “gone on way too long” and that she had “to have multiple hearings as it relates to motions to compel and obtaining documents” from Husband. Tr. Vol. 2 at 43-44. She then testified that she had incurred over $70,000 in attorney's fees and asked that Husband be ordered to pay all or a portion of those fees.

[14] Husband testified and acknowledged that he had used money from Marie to pay the $120,000 settlement amount to First Farmers. He also acknowledged that he and Marie did not have any “formal written legal documents to reflect that loan” and that he has not paid back any portion of that money. Id. at 152. However, he testified that he “absolutely” intended to repay Marie. Id. at 153. Husband also testified about the $350,000 Marie had given to Krom Farms. In particular, Husband testified that he believed that half of that money had come from Russell as the co-owner of Krom Farms and that the other $175,000 was “a debt” that he had “to pay back.” Id. at 156-57. He also testified that, in 2021 and 2022, he “attempted” to make payments but had been able to pay only “[v]ery, very little” back. Id. at 158. He again acknowledged that he did not have any “legal documentation to back up that this is a loan and not some gift” from Marie. Id. at 159.

[15] Following the hearing, the court issued an order in which it valued and divided the marital estate. In relevant part, the court found that the $120,000 Marie had provided to Husband in order to pay the settlement amount to First Farmers was a gift to Husband and not a loan because Husband “had not repaid any monies to his mother” and because Husband and Marie “have no written instrument with any defined terms and provisions that contractually obligate him to repay” Marie. Appellant's App. Vol. 2 at 42. Similarly, regarding the money from Marie for Krom Farms, the court found “no evidence that Marie Krom has even requested payment on any purported loan to Krom Farms, and that such advance of monies was informal, at best.” Id. at 43. Accordingly, the court “decline[d] to find that the funds advanced by Marie Krom are a loan to Krom Farms” but, rather, “determine[d] such funds to be a gift.” Id.

[16] The court also included Wife's “Four (4) $100 Face Value U.S. Savings Bonds” in the marital estate and awarded them to Wife but valued them at “0[.]” Id. at 44. The court then considered the farmland owned by the Trust. Specifically, the court found that the Trust “was split into two trusts upon the passing of Russell,” with Trust One “remaining a revocable trust for the benefit of Marie” and Trust Two “converting to an irrevocable trust for the benefit” of Husband. Id. at 45. The court continued that Husband “is to be the sole beneficiary of all shares of ownership of Krom Farms, all land improvement on land owned by Trust Number 1 and 2,” and all machinery and equipment used by Krom Farms. Id. at 45. As such, the court included in the marital estate Husband's percentage interest in more than 335 acres of farmland, valued at more than $1.6 million. The court then found that neither party had rebutted the presumption of an equal division, divided the assets, and ordered Husband to pay Wife an equalization payment. And the court ordered Husband to pay $25,000 of Wife's attorney's fees. This appeal ensued.

Discussion and Decision

Standard of Review

[17] Husband appeals the trial court's order valuing and distributing property following the dissolution of his marriage to Wife. Where, as here, the trial court entered findings and conclusions, our Supreme Court has explained that we

will not set aside the findings or judgment unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses. Where a trial court enters findings ․, the appellate court reviews issues covered by the findings with a two-tiered standard of review that asks whether the evidence supports the findings, and whether the findings support the judgment․

Additionally, there is a well-established preference in Indiana for granting latitude and deference to our trial judges in family law matters. Appellate courts are in a poor position to look at a cold transcript of the record, and conclude that the trial judge, who saw the witnesses, observed their demeanor, and scrutinized their testimony as it came from the witness stand, did not properly understand the significance of the evidence. On appeal, it is not enough that the evidence might support some other conclusion, but it must positively require the conclusion contended for by appellant before there is a basis for reversal. Appellate judges are not to reweigh the evidence nor reassess witness credibility, and the evidence should be viewed most favorably to the judgment.

Steele-Giri v. Steele, 51 N.E.3d 119, 123-124 (Ind. 2016) (quotation marks and citations omitted).

Issue One: Money from Marie

[18] Husband first contends that the court erred when it treated the money he had received from Marie as a gift rather than a debt. When deciding whether the exchange of money is either a gift or a loan, courts will consider factors such as an expectation or agreement regarding repayment or the accrual and payment of interest. Grose v. Bow Lanes, Inc., 661 N.E.2d 1220, 1225 (Ind. Ct. App. 1996).

[19] Husband argues that the court erred when it determined that the money from Marie was a gift because he “explained” to the trial court that it was a debt and that, while there was no “formal loan documentation․, he and his family operated on ‘handshake’ agreements[.]” Appellant's Br. at 23. And he asserts that he “testified that he intends to repay” the loans and “had in fact made payments” on the Krom Farms loan. Id.

[20] However, the undisputed facts are that Marie gave Krom Farms, a business managed by Husband, $350,000 when it experienced financial difficulties and that she gave Husband $120,000 to pay the settlement agreement to First Farmers. While Husband contends that those monies were loans, “courts are not required to accept one party's characterization of funds received from a third party as debt as opposed to an outright gift.” Crider v. Crider, 15 N.E.3d 1042, 1062 (Ind. Ct. App. 2014) (citing Macher v. Macher, 746 N.E.2d 120, 124 (Ind. Ct. App. 2001)). And, here, there was no promissory note or other documentation to demonstrate it was a loan, Husband did not make any payments toward the $120,000 and made only “[v]ery, very little” payments toward the $350,000, there was no evidence that Marie ever requested any repayments, and there was no agreement as to any repayment terms. Tr. Vol. 2 at 158. Because there was, at best, conflicting evidence as to whether the monies were gifts or loans, the court was not required to accept Husband's characterization of the monies. See Macher, 746 N.E.2d at 124 (finding no error in the court's determination that money was a gift despite Husband's argument that it was a loan because there was no documentation, no payments were made or requested, and no agreement as to repayment terms). We cannot say that the court erred when it determined that the monies Marie gave Husband were a gift.

Issue Two: Trust as Marital Property

[21] Husband next contends that the court erred when it included property owned by the Trust in the marital estate. In an action for dissolution of marriage, the trial court is required to divide the property of the divorcing spouses “in a just and reasonable manner.” Ind. Code § 31-15-7-4(b). Indiana courts utilize a “one-pot” method for calculating and distributing marital property, whereby all property is included in the marital pot and subject to division, regardless of whether it was

(1) owned by either spouse before the marriage;

(2) acquired by either spouse in his or her own right:

(A) after the marriage; and

(B) before final separation of the parties; or

(3) acquired by their joint efforts.

I.C. § 31-15-7-4(a); Estudillo v. Estudillo, 956 N.E.2d 1084, 1090 (Ind. Ct. App. 2011).

[22] On appeal, Husband contends that the court erred when it included property owned by the Trust in the marital pot because, at the time Wife filed for dissolution, Husband did not have any interest in the Trust. We agree.

[23] It is well settled that “the determination of which property must be included as part of the marital estate is based on the date of the parties’ final separation.” Crider v. Crider, 26 N.E.3d 1045, 1048 (Ind. Ct. App. 2015). Only property “that is acquired prior to the date of the final separation is subject to division[.]” Id. (emphasis in original). And, in general, the date of final separation refers to the date that the petition for dissolution is filed. Id. at 1049. Further:

Our Supreme Court has recognized as a “baseline principle of Indiana family law” that “[o]nly property with a vested interest at the time of dissolution may be divided as a marital asset.” Vadas v. Vadas, 762 N.E.2d 1234, 1235 (Ind. 2002) (citing Mullins v. Matlock, 638 N.E.2d 854, 856 (Ind. Ct. App. 1994)). A vested interest is one that is not contingent, that is unconditional, and absolute. Interest, Black's Law Dictionary (11th ed. 2019). Remote and speculative interests are excluded from the marital estate. Dall v. Dall (In re Marriage of Dall), 681 N.E.2d 718, 722 (Ind. Ct. App. 1997).

Bringle v. Bringle, 150 N.E.3d 1060, 1071 (Ind. Ct. App. 2020), trans. denied.

[24] Here, Wife filed the petition for dissolution on April 1, 2020. As such, only the property that the parties had or had an interest in prior to that date could be included in the marital pot and divided between them. As of that date, Russell and Marie were still alive, and the Trust remained a revocable trust for their benefit. See Ex. Vol. 3 at 8. Indeed, because the Trust was a revocable trust, Russell and Marie “retain[ed] the power to revoke or amend the trust at any time.” Fulp v. Gilliland, 998 N.E.2d 204, 207 (Ind. 2013). Stated differently, as of the date Wife filed her petition to dissolve the marriage, Russell and Marie were still alive and had the exclusive right to change the terms of the Trust. As such, Husband's interest in the Trust at that time was remote and speculative and therefore not vested.

[25] We acknowledge that, by the time the court distributed the parties’ assets years after Wife filed her petition and the court had dissolved the marriage, Russell had died, and the Trust had split into Trust One, a revocable trust to the benefit of Marie, and Trust Two, an irrevocable trust to the benefit of Husband. But, again, as of the date Wife filed her petition—and, indeed, even as of the date the court dissolved the marriage—Husband had no interest in the Trust, and Russell and Marie could have made whatever changes they desired. Husband did not acquire any interest in the property owned by the Trust until Russell died, which was after Wife filed her petition and the court dissolved their marriage.

[26] Because Husband did not have a vested interest in the Trust property at the time Wife filed her petition, which was the date on which the marital pot “closed,” the court clearly erred when it included that property in the marital estate. We therefore reverse the court's order and remand with instructions for the court to recalculate and redistribute, if necessary, the marital estate.

Issue Three: Valuation of Savings Bonds

[27] Next, Husband argues that the court erred when it distributed Wife's savings bonds to her as an asset but assigned them a zero-dollar value. Here, the trial court awarded Wife her four savings bonds, which the parties agreed had a value of approximately $751. See Ex. Vol. 3 at 20 (Wife's marital balance sheet) and Ex. Vol. 6 at 25 (Husband's marital balance sheet). Despite the agreed value, the court awarded them to Wife but valued them at $0. While the court did not provide a reason for this, Wife argued for a zero-dollar value simply because she had them “before [she] was married.” Tr. Vol. 2 at 29. However, again, in a dissolution action, the court “shall divide” the property of the parties, even if “owned by either spouse before the marriage.” I.C. § 31-15-7-4(a)(1). As such, the court erred when it gave the savings bonds a zero-dollar value, which effectively removed them from the marital pot. On remand, when the court recalculates and redistributes the marital property, we instruct the court to give the bonds their undisputed value.

Issue Four: Attorney's Fees

[28] Finally, Husband argues that the court abused its discretion when it ordered him to pay $25,000 of Wife's attorney's fees. “We review a trial court's award of attorney's fees for an abuse of discretion.” J.B. v. S.W. (In Re G.G.B.W.), 80 N.E.3d 264, 272 (Ind. Ct. App. 2017), trans. denied. An abuse of discretion occurs when the court's decision is clearly against the logic and effects of the facts and circumstances before the court or if the court has misinterpreted the law. Id.

[29] In awarding attorney's fees, the trial court “must consider the resources of the parties, their economic condition, the ability of the parties to engage in gainful employment and to earn adequate income, and such factors that bear on the reasonableness of the award.” Id. “The trial court may also consider any misconduct by one party that causes the other party to directly incur additional fees.” Id.

[30] Husband contends that “the evidence does not support” an award of attorney's fees to Wife. Appellant's Br. at 31. But, here, the parties presented, and the court considered, evidence regarding their respective financial positions. Indeed, the court found, and Husband does not dispute, that Husband earns $750 per week from his employer but that his “income is difficult to accurately calculate” because he received “significant undocumented third-party contributions[.]” Appellant's App. Vol. 2 at 36. Thus, for child-support purposes, the court determined that Husband's weekly gross income is $975. The court determined that Wife earns $400 per week. In other words, Husband earns more than twice what Wife does. Further, the court heard evidence that Wife had incurred over $70,000 in attorney's fees in part because she had to have “multiple hearings as it relates to motions to compel” after she had difficulty obtaining documents from Husband. Tr. Vol. 2 at 44. Given Husband's superior income and the reason for many of the hearings, we cannot say that the court abused its discretion when it ordered Husband to pay a portion of Wife's attorney's fees.¹

Conclusion

[31] The trial court did not err when it determined that the monies from Marie were a gift. Further, the court did not abuse its discretion when it ordered Husband to pay a portion of Wife's attorney's fees. However, the court clearly erred when it included the Trust property in the marital estate because Husband did not have an interest in that property at the time Wife filed her petition for dissolution, and the court erred when it awarded Wife her savings bonds but gave them a zero-dollar value. We therefore affirm in part, reverse in part, and remand for further proceedings.

[32] Affirmed in part, reversed in part, and remanded.

FOOTNOTES

1.   To the extent Husband argues that Wife's new husband was paying her attorney's fees, we note that Wife testified that her new husband had died prior to the hearing and that she did not believe she would “inherit from his estate[.]” Tr. Vol. 2 at 50. Thus, there is no evidence that Wife's financial situation would improve because of her subsequent marriage.

Bailey, Judge.

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