Land Sold Under a Life Tenant’s Power of Sale for Their Welfare is Valid

December 4, 2023 | Jennifer Harrington

The case is Guiter v. Meinecke, No. 23-0773 (Iowa Ct. App. Nov. 21, 2023).

On November 21, 2023, the Court of Appeals affirmed the district court’s ruling that farmland sold by a life estate holder was proper. The life estate holder was granted a power of sale for the purpose of funding her “health, support, and maintenance.” A remainderman challenged the sale, arguing there was no proof the sale was done in order to fund the life tenant’s welfare. The court of appeals found that the remainderman, not the life tenant, had the burden to prove why the sale was done. Because the remainderman did not provide any evidence that the sale was done for any reason other than the life tenant’s welfare, the sale was valid, even if the will otherwise restricted the life interest holder’s right to sell the property.

Facts

Roberta Meinecke acquired her life estate in farmland through her deceased husband’s will in 2003.  The will also gave Roberta a power of sale “for the purpose of acquiring money for her health, support, and maintenance” and neither court order nor remainderman consent was necessary prior to the sale. The will also stated that “any person dealing with [Roberta]” during a  sale could rely upon her certification that she acted “in accordance with the terms of this will.”

In December 2021, Roberta transferred the life estate to a trust. In January 2022, Roberta’s son who was acting as her agent pursuant to a power of attorney document, signed a purchase agreement to sell the farmland.  The executor of the deceased husband’s estate also signed the purchase agreement. There was no certification that the sale was done pursuant to terms found in the will.  Roberta died mid-February 2022.

In March 2022, a remainderman sued the executor of the deceased husband's estate arguing that the sale was invalid because there was no evidence it was done to fund Roberta’s healthcare needs or daily living expenses. They also argued the failure to certify should invalidate the sale since it was required under the will.

The district court determined that the life tenant had an unrestricted power of sale since it was clear no advanced permission from the court or remaindermen was necessary. It also found that the certification was not for the benefit of the remaindermen and was therefore not necessary.

Opinion

On review, the court of appeals found that Roberta’s estate did not need to justify the sale was for Roberta’s welfare. Instead, the remainderman had the burden to prove that Roberta sold the land for an unauthorized purpose. The burden of proof rests upon the party that pleads a cause of action. The remainderman did not provide any evidence that the sale was done for any other reason. Therefore, assuming without deciding that the language of the will restricted Roberta’s power to sell the real estate — except to acquire money for her health, support, and maintenance — the court ruled that the remainderman had not met her burden to prove that the sale was invalid. The court also found the certification provision of the will was only for the benefit of a purchaser, not for the benefit of the remainderman. Therefore, the lack of a certification could not be used to bolster their argument.