Court of Appeals of Indiana | Memorandum Decision 46A03-1408-TR-287 | March 30, 2015 Page 1 of 8

MEMORANDUM DECISION

Pursuant to Ind. Appellate Rule 65(D), this 

Memorandum Decision shall not be regarded as 

precedent or cited before any court except for the 

purpose of establishing the defense of res judicata, 

collateral estoppel, or the law of the case.

 

ATTORNEY FOR APPELLANT

Douglas L. Biege

Drayton, Biege, Sirugo & Elliott, LLP

LaPorte, Indiana

ATTORNEY FOR APPELLEE

Bradley J. Adamsky

Newby, Lewis, Kaminski & Jones, LLP

LaPorte, Indiana

I N T H E

COURT OF APPEALS OF INDIANA

In the matter of the Donald L. 

Colbert Living Trust dated 5-27-

2008 created by Settlor, Donald 

L. Colbert,

Barbro Colbert,

Appellant, 

v.

Katherine Colbert Kraek,

Appellee.

March 30, 2015

Court of Appeals Case No.

46A03-1408-TR-287

Appeal from the LaPorte Superior 

Court; The Honorable Richard R. 

Stalbrink, Jr., Judge;

46D02-1402-TR-11

May, Judge.
Court of Appeals of Indiana | Memorandum Decision 46A03-1408-TR-287 | March 30, 2015 Page 2 of 8

[1] One of the named beneficiaries of the Donald L. Colbert Living Trust, Colbert’s 

widow, Barbro, appeals an “Order Providing for the Interpretation of a Living 

Trust for [Colbert’s Daughter] Katharine Colbert Kraeck and the Credit Shelter 

Trust.” (App. at 4.) Barbro argues on appeal the trial court improperly 

interpreted the Trust provisions in such a way that the Marital Share portion of 

the Trust was not funded.

1

 

[2] We affirm. 

Facts and Procedural History

[3] In 2008, Donald Colbert (“Colbert”) created the Donald L. Colbert Living 

Trust. The named beneficiaries were Donald’s wife, Barbro, and his daughter, 

Katherine Kraeck. Colbert died June 19, 2013. His will provided all his assets 

would pour into the Trust. The corpus of the Trust included personal property 

worth about two million dollars. 

[4] Article Seven of the Trust, “Creation of Trust Shares Upon My Death,” 

provides “If my wife survives me, my Trustee shall divide the remaining trust 

property into two separate shares as provided in Section 7.01 and Section 7.02. 

One share shall be designated the ‘Marital Share’ and the other share shall be 

designated the ‘Non-Marital Share.’” (Id. at 91). Barbro survived Colbert. 

 

1 As the trial court correctly interpreted the Trust language in a manner that reflected Colbert’s intent, we do 

not address Barbro’s alternative argument that the trial court should have reformed the Trust so that it would 

conform to Colbert’s intent. 
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[5] The Trust assets were to be divided differently depending on the status of the 

federal estate tax.2 Section 7.01, “Division of my Trust (No Federal Estate 

Tax),” provided:

If there is no federal estate tax in effect at my death and Section 1022 

of the Internal Revenue Code is in effect, my Trustee shall allocate to 

the Non-Marital Share assets from the remaining trust property 

selected by my Trustee that shall collectively have a sufficient amount 

of appreciation to fully utilize the entire aggregate basis increase 

allowed under Section 1022(b) of the Internal Revenue Code. 

From the remaining trust property, my Trustee shall allocate to the 

Marital Share trust property selected by my Trustee that, taking into 

account any other property passing to my wife by reason of my death 

(whether under or outside of this agreement) shall collectively have a 

sufficient amount of appreciation to fully utilize the spousal property 

basis increase available to my estate under Section 1022(c) of the 

Internal Revenue Code. 

(Id.). The remaining Trust property would be allocated to the Non-Marital 

Share. 

[6] Section 7.02, “Division of My Trust (Federal Estate Tax Exists),” provided:

If federal estate tax is in effect at my death, my Trustee shall divide the 

remaining trust property into the Marital Share and the Non-Marital 

Share as provided in this Section. 

(a) Creation of the Marital Share

 

2

 When Colbert created the Trust in 2008 he presumably contemplated a changed federal estate tax scheme 

depending on when he died. The Economic Growth and Tax Relief Reconciliation Act of 2001 gradually 

reduced the maximum federal estate tax rate and gradually increased the applicable exclusion amount from 

$1 million in 2002 to $3.5 million in 2009. The federal estate tax was reinstated for 2010 with a five million 

dollar applicable exclusion amount. Steingass v. Steingass, 2012-Ohio-1647, ¶¶ 3-5 (Ohio Ct. App. 2012). 
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My Trustee shall allocate to the Marital Share a fractional share of the 

remaining trust property calculated as follows:

(1) The Numerator

The numerator of the fraction shall equal the minimum value, 

assuming the value qualifies for the federal estate tax marital 

deduction, sufficient to reduce the federal estate tax to the 

lowest possible amount. In computing the numerator, my 

Trustee shall take into account my gifts (including gifts treated 

as made by me) and all deductions, exclusions, credits and 

reductions in value allowed in computing such tax; provided, 

however, that any state death tax credit shall be taken into 

account for this purpose only to the extent that it does not 

increase the amount of state death taxes payable.

(2) The Denominator

The denominator shall consist of the value of the remaining 

trust property as finally determined for federal estate tax 

purposes. 

The Marital Share shall carry its pro rata share of the income, provided 

that in no event shall the Marital Share receive less income than that 

required to be paid to my wife under applicable state law.

3

 

(Id. at 92) (footnote and emphasis added). 

 

3 We acknowledge Barbro’s assertion “the result of the trial court’s interpretation disinherits Barbro Colbert 

completely, leaving the entire trust to Katherine Kraeck.” (Reply Br. of Appellant/Barbro Colbert at 5.) It is 

not apparent Barbro is “disinherit[ed] . . . completely.” Section 7.02 includes the language “in no event shall 

the Marital Share receive less income than that required to be paid to my wife under applicable state law.” 

Furthermore, Article Six of the Trust explicitly provides “any tangible personal property not disposed of by a 

written memorandum” is to be distributed to Barbro. The parties do not direct us to a written memorandum 

that otherwise disposes of any tangible personal property. Katherine also notes any jointly held property 

would pass to Barbro by operation of law. 
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[7] On Barbro’s death, the Marital Trust would terminate and the remainder would 

be administered pursuant to Section Nine, the Trust for Katharine Colbert 

Kraeck. 

[8] When Colbert died in June 2013, the federal estate tax was in effect and Section 

1022 of the Internal Revenue Code was not. Barbro asked the trial court to 

determine the proper funding of the marital share and the non-marital share of 

the Trust. The trial court entered an Order Providing for the Interpretation of a 

Living Trust for Katharine Colbert Kraeck and the Credit Shelter Trust, (id. at 

4), in which it determined the Marital Share would not be funded and the 

funding would instead be directed to the Credit Shelter Trust of which Colbert’s 

daughter was beneficiary. 

Discussion and Decision

[9] The interpretation of a trust document is a question of law for the court. Kristoff 

v. Centier Bank, 985 N.E.2d 20, 23 (Ind. Ct. App. 2013), trans. denied. The 

primary purpose of the court in construing a trust instrument is to ascertain and 

give effect to the settlor’s intent. Id. Indiana follows “the four corners rule,”

which provides extrinsic evidence is not admissible to add to, vary or explain 

the terms of a written instrument if the terms of the instrument are susceptible 

of a clear and unambiguous construction. Id. Thus, if a trust document is 

capable of clear and unambiguous construction, we must give effect to the 

trust’s clear meaning without resort to extrinsic evidence. Id. We are not at 

liberty to rewrite the trust agreement. Id. If a trust must be interpreted, its
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interpretation is a question of law we review de novo, giving no deference to the 

trial court’s interpretation. Univ. of S. Ind. Found. v. Baker, 843 N.E.2d 528, 531 

(Ind. 2006). 

[10] Trust language is ambiguous only if reasonable people could come to different 

conclusions about its meaning, but a trust is not ambiguous merely because the 

parties disagree as to its interpretation. Kelly v. Estate of Johnson, 788 N.E.2d 

933, 935 (Ind. Ct. App. 2003), trans. denied. We cannot “interpret” an 

unambiguous trust or will; we can construe such a document to determine the 

testator’s intent only if there is ambiguity in need of interpretation. Unborn 

Beneficiaries of Kreigh Family Trust v. Kreigh, 554 N.E.2d 1167, 1168 (Ind. Ct. 

App. 1990). It is contrary to basic rules of contract interpretation to fail to give 

plain meaning to an unambiguous contract term that exists in the document. In 

re Stephen L. Chapman Irrevocable Trust Agreement, 953 N.E.2d 573, 580 (Ind. Ct. 

App. 2011) (applying rule to interpretation of trust language), trans. denied. 

[11] The portion of the Trust document that addresses creation of Trust shares on 

Colbert’s death has two sections. Section 7.01, “Division of my Trust (No 

Federal Estate Tax),” applies “[i]f there is no federal estate tax in effect at my 

death and Section 1022 of the Internal Revenue Code is in effect.”4 Section 

 

4

 Despite numerous references throughout the briefs, neither party provides a full citation to “Section 1022.” 

They are presumably referring to 26 U.S.C. § 1022. The parties agree section 1022 was not in effect when 

Colbert died. 
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7.02, “Division of My Trust (Federal Estate Tax Exists), applies “[i]f federal 

estate tax is in effect at my death.” As explained in note two above, the federal 

estate tax was in effect when Colbert died; therefore the trial court correctly 

determined the Trust property should be divided pursuant to Section 7.02, 

“Division of My Trust (Federal Estate Tax Exists).” (App. at 92.) 

[12] Under Section 7.02, the allocation of the Trust property to the Marital Share is 

determined by the following formula:

My Trustee shall allocate to the Marital Share a fractional share of the 

remaining trust property calculated as follows:

(1) The Numerator

The numerator of the fraction shall equal the minimum value, 

assuming the value qualifies for the federal estate tax marital 

deduction, sufficient to reduce the federal estate tax to the lowest 

possible amount. In computing the numerator, my Trustee shall take 

into account my gifts (including gifts treated as made by me) and all 

deductions, exclusions, credits and reductions in value allowed in 

computing such tax; provided, however, that any state death tax credit 

shall be taken into account for this purpose only to the extent that it 

does not increase the amount of state death taxes payable.

(2) The Denominator

The denominator shall consist of the value of the remaining trust 

property as finally determined for federal estate tax purposes.

[13] As the marital deduction exceeded the value of Colbert’s estate, the numerator, 

i.e., “the minimum value, assuming the value qualifies for the federal estate tax 

marital deduction, sufficient to reduce the federal estate tax to the lowest 
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possible amount” is zero.5 The trial court therefore correctly determined the 

Marital Share would not be funded, and we affirm its judgment.

[14] Affirmed.

Barnes, J., and Pyle, J., concur.

 

5

 Barbro asserts “the minimum value of the estate to reduce the federal estate tax would be the value of the 

entire corpus/estate,” (Barbro Colbert/Appellant’s Br. at 12), relying on the phrase “assuming the value 

qualifies for the federal estate tax marital deduction.” She offers no explanation or citation to authority to 

support the premise that language has that effect. We accordingly decline to reverse the trial court on that 

ground. See, e.g., Dickes v. Felger, 981 N.E.2d 559, 562 (Ind. Ct. App. 2012) (a party waives an issue where the 

party fails to develop a cogent argument or provide adequate citation to authority and portions of the record).