Division of Farm Property in Divorce Case

December 30, 2010 | Erin Herbold

In Iowa, courts handling divorce matters must make an “equitable division” of the marital property.  Ultimately, equitable division is to be evaluated on a case-by-case basis in accordance with the special circumstances of the marriage. Iowa Code §598.21(5) lists the factors for the equitable division of inherited or gifted property.  Those principles can be difficult to apply in the context of a farming business.  The division of inherited and gifted property in a divorce was the major issue in this case. 

Here, the couple had been married for nearly 30 years. During that time, they accumulated substantial wealth with their total estate valued at more than $7 million. The wife had three children from a prior marriage and two children were born of the marriage. The couple’s assets included ten parcels of farmland and two farm business entities that owned the machinery, grain, and hog confinement barns. Before the marriage, the husband owned four parcels of farmland, rented additional land and raised hogs. Part of this land had been gifted to him by his parents.  In addition, the husband inherited two tracts from his parents during the time of his marriage. The wife had little net worth at the time of the marriage. During the marriage, the wife took care of the children, kept the books, and helped on the farm on a part-time basis. The parties did not dispute that the wife’s contribution to the farming operation was significant.

In October 2007, the wife started dissolution proceedings and bought a home in Colorado using marital assets. At trial, the court was tasked with dividing their property. The major unresolved issue before trial was the division of the farm property and treatment of the assets the husband inherited during the marriage and the property he was gifted before marriage. The trial court awarded the inherited property to the husband, but did not set aside the value of the gifted property in favor of the husband. The husband appealed, arguing that the value of the farmland gifted to him by his parents should have been set aside. 

The appellate court reviewed several other economic provisions of the trial court’s divorce decree and then focused on the division of the inherited and gifted farmland. The appellate court looked to Iowa Code §598.21(5) to determine whether the husband should have been afforded full credit for the gifted property.  Iowa law requires the court to divide “all property, except inherited property or gifts received by one party” equitably between the parties. According to the court, gifted and inherited property is considered “non-marital” property, unless setting aside the property for the benefit of one spouse is inequitable to the other. 

The appellate court looked to prior Iowa Supreme Court precedent and identified several factors to determine whether gifted or inherited property should be divided. The factors are:  (1) whether the parties both contributed towards the care, preservation or improvement of the property; (2) whether there was a close relationship between the donor or testator and the spouse; (3) whether separate contributions were made by both parties to preserve the economic welfare of the property; (4) whether either party has special needs; and (5) whether it would be plainly unfair to a spouse or child to set aside the property to benefit the other spouse. 

The court reviewed all of the above factors and focused on the gifted property and found that the trial court’s division was appropriate, considering the length of the marriage, the contributions made by the wife in labor and time, and the debt that existed on the property. Further, the court found that the wife had contributed to the improvement of the property and helped with the farming operation by planting and harvesting, walking beans, helping with livestock chores, and by doing bookkeeping and participating in marketing decisions. In other words, the husband and wife operated the farm as a team and both parties contributed to and improved the gifted land. Thus, the trial court correctly divided the gifted property. In re Marriage of Antoine, No. 0-552/09-1653, 2010 Iowa App. LEXIS 1551 (Iowa Ct. App. Dec. 8, 2010).