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Probate is a court-supervised process for transferring assets after death. While the term “probate” often describes the process by which the court administers a will, probate may be required for those who die without a will as well. The probate process seeks to ensure an orderly transfer of assets, all the while protecting the rights of creditors and heirs.
When someone dies with a will, a surviving family member or other person close to the decedent must ensure that the decedent’s wishes specified in the will are followed. This usually requires the will to be “probated” or submitted to and administered by the court in the jurisdiction where the decedent lived.
When someone dies, another individual will need to handle the affairs of the deceased individual.
On April 27, 2022, the Iowa Court of Appeals determined that the district court’s grant of summary judgment was not appropriate because genuine issues of material facts existed in a case involving the priority of competing perfected security interests and agricultural-supply-dealer liens. After a dairy operation liquidated its assets, there were insufficient proceeds to satisfy all claims against the farm. A financial institution and a feed dealer each claimed to have priority to these proceeds. Because the record did not adequately provide the facts necessary to resolve the dispute under Iowa Code chapters 554 and 570A, the court denied both parties’ motions for summary judgment and remanded the case for further proceedings.
On March 2, 2022, the Iowa Court of Appeals upheld a district court’s award of three parcels of farmland to a former husband through a divorce decree. The farmland was distributed from partnership interests the husband’s parents had gifted him during the marriage. The former wife argued on appeal that the real estate was marital property because the partnership interests were compensation for the work the husband did for the family farm business. The court of appeals disagreed. The court did agree, however, that the wife was entitled to a larger alimony award.
Most people die owning a vehicle, but fewer individuals know what to do with the car once a loved one passes. This guide reviews the basics. It explains the procedures under Iowa law, but those from other states may learn from the general concepts.
Typically, there is no need to contact lawyer immediately after the passing of a loved one.[i] Instead, this is the time to focus on family needs and the disposition of the body. This checklist explains what should be done in the first weeks following a death until the death certificate is issued.
On March 22, 2022, the Director of the Iowa Department of Revenue joined the IRS in granting estimated tax penalty relief to qualifying farmers who did not file their 2021 returns and pay their taxes by March 1, 2022. In Order 2022-1, Iowa waives the underpayment of estimated tax penalty for any qualifying farmer who files their 2021 Iowa income tax return and remits payment by May 2, 2022.
Iowa Code chapter 717A, sometimes referred to as Iowa’s “ag-gag” law, is once again the subject of federal litigation. On March 14, 2022, a federal judge from the Southern District of Iowa found the 2019 version of the law unconstitutional. Iowa Code § 717A.3B provides criminal penalties for those who, intending to harm an agricultural production facility, use deception to gain access to or employment with that facility. The judge held that the statute violated the First Amendment. Accordingly, she granted the plaintiffs’ motion for summary judgment.
On March 2, 2022, the Iowa Court of Appeals affirmed a district court decision finding that the transfer of a joint tenant’s interest in real property into a trust severed the joint tenancy.
On March 4, 2022, the Iowa Supreme Court held that a manager of an LLC was not entitled to attorney fees incurred defending himself against claims brought by the LLC or prosecuting claims against the LLC. A manager of an LLC may recover costs incurred “in the course of the member’s or manager’s activities on behalf of the company.” Iowa Code § 489.408(1). Because the manager incurred costs litigating against the LLC, the Supreme Court reversed the district court and Court of Appeals rulings and held that the statute did not require the company to indemnify the manager.
This article answers common questions that may arise during the estate and transition planning process.
On March 1, 2022, Governor Kim Reynolds signed HF 2317 into law. The new tax law will reduce individual and corporate income tax rates, provide exemptions from Iowa tax for certain forms of retirement income--including retired farmer rental income--and scale back certain tax credits.
On January 27, 2022, the Iowa Court of Appeals overturned a district court’s award of punitive damages in a conversion claim. On summary judgment, the trial court found that the defendants acted with malice towards the plaintiff when they refused to return a skid loader that was located on recently foreclosed property after the owner of the skid loader demanded its return. The Court of Appeals, in a split decision, overturned the portion of the judgment awarding punitive damages.
On January 12, 2022, the Iowa Court of Appeals affirmed that a premarital agreement prevented the surviving spouse from taking the statutory elective share against the deceased spouse’s estate. Although the premarital agreement did not specifically list the deceased spouse’s century farm as an asset, it still provided the surviving spouse “fair and reasonable disclosure” of his financial conditions. Therefore, the Court of Appeals affirmed.
“Heirs’ Property” generally refers to family owned property inherited by multiple generations without the formal legal proceedings necessary to prove ownership. Without probate proceedings at an owner’s death, heirs may possess the property, but they lack the clear title necessary to prove their ownership status. This means they may not be able to sell the property, use the property as collateral for financing, or receive USDA benefits for farming activities conducted on the property.
On January 27, 2022, the Iowa Court of Appeals affirmed a jury award in an eminent domain proceeding. In 2019, the Iowa Supreme Court held that the condemnation of farmland for the Dakota Access pipeline was constitutional. Because the landowner did not show that the district court abused its discretion when it excluded certain evidence allegedly impacting the value of the property after the taking, the court affirmed there were no grounds for a new trial.
On January 12, 2022, the Iowa Court of Appeals affirmed that a group of landowners did not follow the required statutory appeal route to challenge a drainage assessment. After a county drainage district assessed the cost of a failed annexation against landowners in the district, the landowners filed a petition for declaratory judgment. Because the landowners did not file an appeal as required under Iowa Code section 468.83(1), the Court of Appeals affirmed the district court’s dismissal of the landowners’ petition for failure to state a claim.
Potential tax changes dominated most 2021 tax discussions. Proposals such as the American Families Plan sought to significantly increase the capital gains tax rate and require recognition of capital gain at death or at gift. A later House of Representatives proposal sought to increase the capital gains tax rate and cut the estate and gift tax exemption in half in 2022.
On December 3, 2021, the Iowa Supreme Court affirmed that the assignee of foreclosed agricultural property did not meet the statutory requirements to redeem the farmland. A debtor may redeem property by paying the sale price plus costs and interest within a one-year period of the sale. See Iowa Code § 628.13. Because the assignee did not pay the full price within the redemption period, the Supreme Court affirmed that the redemption was untimely.
Like 2020 before it, 2021 was no ordinary year. As we leave the year behind, we review key tax considerations arising from 2021’s unique circumstances and look ahead to the 2022 tax filing season. This post reviews the tax treatment of common COVID-19 benefits distributed in 2021. With high crop yields and robust commodity prices, many farmers closed 2021 with more income than they expected.
With high crop yields and robust commodity prices, many farmers are closing 2021 with more income than they expected. Likewise, input costs for 2022 are on track to reach record highs. In light of these trends, many farmers may have sought to even out income by deferring income from 2021 into 2022, by prepaying expenses in 2021, or by purchasing depreciable property.
Many farmers regularly and generously give to their churches or other charitable organizations. This article reviews the rules for gifting a raised commodity directly to the charity, instead of selling the grain or livestock and then donating the proceeds. This strategy can allow some farmers to recognize both income tax and self-employment tax savings.
We frequently receive questions about depreciating and expensing business vehicles. This post provides a brief summary of the general rules for 2021.
On December 15, 2021, the Iowa Court of Appeals released an opinion involving a dispute over the sale of a railroad-tie-removal business. Without several key terms included in the contract, the court was left to determine the parties’ intent. Because the Seller did not provide his “best efforts” to assist the Buyer retain and expand the business, the Seller breached his consulting obligations. Therefore, the Court of Appeals affirmed that the Buyer was not obligated to pay the Seller the outstanding consulting fees.
Rural landowners are sometimes asked to enter into an agreement to allow a developer to run a pipeline or power lines across their property. These are important decisions with permanent consequences. Landowners considering entering into such a contract should seek legal counsel to carefully review and negotiate the terms.
It is impossible to overstate the impact of Dr. Neil Harl on the field of agricultural law and taxation. It is also impossible to put into words the legacy he left with his many students and the agricultural community at large
On October 6, 2021, the Iowa Court of Appeals affirmed an order from the district court, dividing a 50-acre parcel between two brothers pursuant to a partition in kind action. Robert Tolle sought a partition in kind of the parcel he owned as a tenant in common with his brother, Rickey. Instead of adopting either brothers’ division proposals, the district court accepted the appointed referee’s plan. The Court of Appeals affirmed, holding that the district court did not err when considering “what would be most equitable and practicable.”
On October 6, 2021, the Iowa Court of Appeals affirmed the denial of Zachary Tew’s workers’ compensation claim. Tew filed a petition for worker’s compensation benefits claiming that he was injured during his employment as an egg stacker. The Court of Appeals affirmed the denial of Tew’s request finding that he did not present credible testimony that his employment caused his injury.
On September 30, 2021, President Biden signed a continuing resolution into law. This new law, intended to temporarily fund the government through December 3, 2021, also contains provisions to provide new retroactive disaster relief to some farmers impacted by the 2020 derecho and other weather events.
In this case, the Iowa Court of Appeals reminds us that “contracts mean what they say.” On October 6, 2021, the Court of Appeals reversed an order from the district court finding that a hotel owner breached a contract with a construction company. Because the contractor failed to follow the required steps to change the scope of the project, the Court of Appeals reversed the district court’s order, finding that the hotel owner did not breach the contract.
H-2A workers have legal rights that H-2A employers are required to respect. These rights include being provided free transportation and housing, being provided with all guarantees outlined in the work contract approved by the Department of Labor, and being free from discrimination for reasons related to their immigration status or citizenship.
In this case, farm borrowers once again challenged court orders surrounding their farm foreclosure. In November 2017, the district court granted summary judgment and a foreclosure decree in favor of the bank. On February 3, 2021, the Iowa Court of Appeals denied the farm borrowers’ request to set aside the sheriff’s sale of their property because any “irregularities” in the sale were due to the plaintiffs’ own actions.
There are three common ways to transfer assets: transferring the asset at death (inheriting), gifting the asset, or selling the asset. Ultimately, each way will result in a new owner, but the new owner’s basis in the asset will be different, depending on the technique.
Business entities can be helpful tools for transitioning a farm business to new or additional owners. When examining the consequences of having the farm in a business entity, default state law guides all transactions, unless the business’ operating agreement/articles of organization/partnership agreement or buy-sell agreement say otherwise.
H-2A must follow a number regulations designed to protect workers’ rights and ensure compliance with U.S. immigration laws. This publication provides a basic overview of these rules.
H-2A employers must provide housing to certain employees.
H-2A employers must provide certain transportation for H-2A workers. This article discusses the requirements employers must follow.
On August 4, 2021, Summit Carbon Solutions, LLC, initiated the legal process to build a proposed 710-mile carbon sequestration pipeline through 30 Iowa counties by filing a request for public informational meetings with the Iowa Utilities Board.
The H-2A temporary agricultural program allows agricultural employers facing a labor shortage to hire workers from foreign countries. Workers under the program are guaranteed the means of travel, food, and housing from their employers.
As many taxpayers are working to finalize extended returns, many in Congress are working to finalize language for tax reform legislation. Here we provide a brief update on the status of tax reform and what we may expect in the next several weeks.
For tax years beginning in 2021, the American Rescue Plan Act (ARPA) significantly expanded the child tax credit. It also implemented advance child tax credit payments, and a possibility that taxpayers may face a repayment obligation if the advance payments are too high. Taxpayers facing a potential repayment may wish to unenroll from these advance payments.
The American Rescue Plan Act of 2021 (ARPA), Pub L. No. 117-2, significantly enhanced the availability of the Affordable Care Act’s (ACA) premium tax credit (PTC) to make healthcare acquired on the ACA’s Health Insurance Marketplace more affordable for 2020, 2021, and 2022. These changes could mean significant savings to taxpayers purchasing healthcare coverage on the Marketplace.
The employee retention credit (ERC) has been an important tax credit for many employers in 2020 and 2021. Although a fairly complicated credit, the ERC can be very beneficial to many employers. Recent guidance has clarified several longstanding questions. Here, we provide a brief overview of the credit, as well as a summary of the new guidance.
On August 16, 2021, the Ninth Circuit brought closure to long-standing wetlands litigation between Idaho property owners and the Environmental Protection Agency (EPA). Despite the EPA’s intent to no longer pursue enforcement action, the court held that the case was not moot and that the property consisted of wetlands under the “significant nexus” test.
It’s that time of the year to again think about Iowa’s farm lease auto-renewal law. Tenants or landlords who do not wish to continue a farm lease into 2022 should be aware that their 2021 farm lease will automatically renew under the same terms and conditions if neither party takes action by or before September 1.
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.