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On October 25, 2023, the Iowa Court of Appeals affirmed the district court’s ruling that a 96-year-old woman had testamentary capacity when she rewrote her will to disown her family and to give all farmland to charity. Although she may have believed she had a life estate in some of the farm ground instead of the fee simple interest she held, the testatrix did not “need to have a perfect understanding of [her] ownership interest” to know the nature and extent of her property. The rewritten will was upheld, and the charity received all farmland.
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.
Beginning January 1, 2024, most small entities—including single member LLCs—must file online reports with the federal government, disclosing information about the beneficial owners of the entities. This new reporting requirement—estimated to impact at least 32.6 million entities in 2024—was created by the Corporate Transparency Act (CTA).
On October 25, 2023, the Iowa Court of Appeals upheld the district court’s summary judgment ruling in a family transaction involving a long-term farm lease and purchase option. Thomas, the son, sued his parents arguing that they breached the purchase option when they entered into a twenty-year lease after executing the purchase option but before the purchase option was exercised. The court found there was no breach. The purchase option merged with the deed upon acceptance of the deed which expressly noted the existence of the lease.
On October 11, 2023, the Iowa Court of Appeals found that one brother failed to properly account to his brothers for the farming proceeds received while marketing organic crops. The two brothers lost their organic certification in 2015 and for the next two seasons enlisted their brother, Dietrich, to obtain the required certifications and market the crops. Eventually the two brothers sued Dietrich for an accounting and payment due, claiming their brother had a fiduciary duty to them.
On October 11, 2023, the Iowa Court of Appeals affirmed the district court when it ruled that one owner of tenancy-in-common could not terminate a farm lease entered into by a life estate holder without the permission of the other co-owners. The court also affirmed that a co-executor could not terminate a farm lease during probate administration without the unanimous consent of the other co-executors.
The Free Application for Federal Student Aid (FAFSA) will undergo major changes for the 2024-2025 school year. One major change is that the adjusted value of a family farm or small business will be used when calculating expected financial contribution from parents. Prior to this year, the net value of a family farm or small business was not included.
On September 8, 2023, the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Army Corps) published a revised definition of “waters of the United States” or WOTUS. 88 FR 61964. To conform with the U.S. Supreme Court’s recent Sackett v. EPA, 143 S. Ct. 1322 (2023) ruling, the agencies made various changes including the removal of the “significant nexus” standard and amending the definition of “adjacent.” The new rule went into effect September 8, 2023. Because the revision was required to make the Rule comply with the Sackett decision, no notice and opportunity for public comment was necessary.
After disagreements over the boundary line between two neighbors occurred, the plaintiffs brought this lawsuit alleging boundary by acquiescence and adverse possession. The trial court found that the plaintiffs had maintained the 8.5-foot strip of land and ruled in favor of the plaintiffs. On appeal, the court found that the plaintiffs only began maintaining the disputed area six years earlier when the defendants purchased the adjoining parcel. Because the plaintiffs did not meet the statutory ten-year requirement for either claim, the Court of Appeals reversed the district court’s ruling.
On August 9, 2023, the Iowa Court of Appeals affirmed that a boundary by acquiescence was established between a farm and neighboring homeowner. The parties treated a fence as the boundary line for over ten years. Even though a homeowner later tore the fence down, the boundary line was still clearly marked from farming activities. Therefore, the Court of Appeals affirmed the district court’s finding in favor of the plaintiffs.
A commercial fishing business harvested shrimp by dragging nets along the ocean floor. The nets would trap other marine animals in addition to the shrimp. The fishermen would throw this “bycatch” back into the ocean. A conservation group brought a citizen-suit under the Clean Water Act (CWA) claiming that the company violated the CWA by 1) disturbing the sediment when it dragged nets along the ocean floor and 2) throwing the bycatch back into state waters bordering the Atlantic Ocean. The district court granted the fishing company’s motion to dismiss. On appeal to the Fourth Circuit Court of Appeals, the court affirmed.
On June 16, 2023, the Federal Circuit for the Court of Appeals affirmed that the U.S. Army Corps of Engineers’ work to restore the Missouri River to its natural condition caused intermittent flooding and constituted a per se taking of farmland. The court determined that because the intermittent flooding would continue into the future, it was a permanent flowage easement and therefore a taking. The court also reversed the trial court’s denial of damages for destroyed crops. It held that lost crops were not a consequential damage of the taking, but a separate compensable property interest.
Beginning July 1, 2023, Iowa producers can sell raw milk within the state under certain conditions. SF 315 provides requirements for the production, sale, and testing of raw milk, raw milk dairy products, and raw milk products. Previously, only Grade “A” pasteurized milk and milk products could be sold. Iowa Code § 192.103 (2022). Before selling raw milk, producers should carefully consider the specific restrictions under the law and potential liabilities.
On July 13, 2023, the Iowa Court of Appeals held that a soybean buyer repudiated the contract when it repeatedly delayed and prevented delivery of soybeans from the farmer. The contract did not specify a time of delivery, but customary practice created an implied term within the contract that prevented the buyer from delaying the delivery for more than five months. The farmer was allowed to sell to another buyer and no damages were owed to the original buyer.
A semi-truck collided with a cow standing on the interstate. The driver brought a negligence lawsuit against the livestock owner claiming that he suffered personal injuries and property damage. The district court determined that the driver failed to prove that the livestock owner breached a duty of care. On appeal, the court affirmed that there was insufficient evidence that the owner failed to use ordinary care to constrain the animal.
In a June 21 ruling, the Iowa Court of Appeals held that helping a neighbor get a downed heifer back on its feet is not a “domesticated animal activity” under Iowa Code § 673.1(3) and therefore Iowa Code § 673.2 does not provides liability immunity for the owner of the heifer. The court overturned the district court’s summary judgment dismissal and remanded the case back to district court.
The potential carbon dioxide pipeline projects in Iowa have created some controversy. One issue that has concerned some landowners is the statute granting companies proposing pipelines the right to access their land for a survey. Several recent cases addressing this issue have come before Iowa district courts.
Producers have until July 14, 2023, to apply for disaster relief under Phase 2 of the Emergency Relief Program (ERP Phase 2) or the Pandemic Assistance Revenue Program (PARP). The USDA recently extended the application deadline from June 2, 2023, to July 14, 2023.
To collect $106,898 of unpaid income taxes from the estate of Francis Glaser, the Iowa Department of Revenue (IDOR) sought to set aside Glaser’s predeath transfers of real estate to his friend. The Iowa Supreme Court held that fraudulent conveyances may only be voided to the extent necessary to pay the debts and charges of the estate. Iowa Code § 633.368. On remand, the friend argued that income taxes are not a debt of the estate. The Court of Appeals disagreed and found that the properties could be sold to satisfy the estate’s debts including IDOR’s claim. However, any remaining funds or unsold properties must be returned to the decedent’s friend.
A fence ran slightly north of the boundary line between two parcels of land. After the landowner of the northern parcel filed a petition for quiet title, the neighbor counterclaimed, alleging that a new boundary line was established through boundary by acquiescence. The district court agreed with the neighbor and ruled that a boundary by acquiescence had been established. In making its ruling, the court held that the simultaneous ownership of both parcels for three years by the person who sold the property to the landowner did not extinguish the pre-existing boundary by acquiescence.
The Iowa Court of Appeals affirmed the probate court’s decision to enforce a will as written even though this resulted in materially unequal distribution among the beneficiaries. With five land parcels and seven children, the decedent created a distribution scheme where five children received land and the other two children would receive a set payment amount. The set payment amounts were low compared to the financial value of the land given to the other five children.
During Iowa’s 2023 Legislative Session that ended Thursday, May 4, legislators passed a number of bills impacting agricultural producers and rural landowners. Read more for a review of the highlights.
On May 25, 2023, the U.S. Supreme Court significantly narrowed the definition of “waters of the United States.” Sackett v. EPA, No. 21-454 (2023). This case marks a decided victory for the Sacketts, an Idaho couple who wished to build a house on property the EPA found to contain federal wetlands.
After the probate court set aside a 2016 will for lack of testamentary capacity and undue influence, the same executor submitted the decedent’s 2012 will to probate. A beneficiary under both wills claimed that the executor violated the 2012 will’s no-contest clause by submitting the 2016 will and also argued that the executor should be removed. The Iowa Court of Appeals affirmed that the executor did not challenge the 2012 will directly or indirectly. It also held that the beneficiary failed to show that the executor was unsuitable and should be removed from her role.
California’s Proposition 12 is here to stay...unless Congress decides to weigh in. On May 11, 2023, the United States Supreme Court ruled that the 2018 law forbidding the sale of whole pork meat that comes from breeding pigs “confined in a cruel manner” did not violate the dormant Commerce Clause of the U.S. Constitution.
An energy company began replacing a substantial portion of components in wind plants it owned and operated. However, the county assessor continued to value the property the same for property tax purposes. The energy company appealed the assessment and claimed that this “repowering” restarted the graduated tax valuation schedule under Iowa Code § 427B.26. Because the entire wind plant was not replaced, the Iowa Supreme Court affirmed that the repowering project did not alter the property tax valuation.
The Iowa Court of Appeals found that the defendants, a father and son, violated their fiduciary duty to a family farm corporation. Father was president and a board member of the corporation. He by engaged in self-dealing by paying personal expenses using the business’s accounts, and he allowed his son, who was the operational manager, to misappropriate corn. The son, as an agent of the corporation also breached his duty of loyalty by misappropriating corn. The court did not find that the conduct of the defendants rose to the level of fraud.
A landowner brought a lawsuit against his neighbor claiming that his property experienced manure runoff after the neighbor applied manure on a nearby field. Because all the landowner’s claims stemmed from a nuisance allegation, the Court of Appeals determined that Iowa Code § 654B.3(1) applied. As such, the landowner was required to request farm mediation before filing the lawsuit. On March 8, 2023, the court affirmed the dismissal of the lawsuit for lack of subject matter jurisdiction.
On March 8, 2023, the Iowa Court of Appeals affirmed the division of a farm partnership’s alleged assets and liabilities after the death of one of the business partners. With “scant” evidence, the Court of Appeals affirmed that the deceased partner took out a loan as an individual, not as a business partner. Additionally, the deceased partner’s estate was not entitled to the proceeds from the sale of the partnership’s farm equipment because it was sold at a loss.
With unclear terms and intentions, two parties attempted to negotiate the sale of a farm property. After both vacillated between moving forward and rescinding the agreement, the seller and the buyer petitioned the court for specific performance of the sale. On March 8, 2023, the Iowa Court of Appeals affirmed the district court’s order of specific performance finding that the seller did not abandon his specific-performance claim.
The Iowa Supreme Court affirmed that a lessee could exercise their renewal option under the rental contract by only giving written notice even though a later paragraph stated that the rental payment would be due when the renewal option was exercised. The court found that the structure of the agreement and renewal option paragraph made the rental payment a term of performance, not a condition precedent to exercising the renewal option.
The Iowa Court of Appeals affirmed the probate court’s allocation of attorney fees and court costs arising from litigation under which the trust received a $159,250 settlement. Pointing to a clause in the trust document stating that “administrative costs” were to be paid from the income generated by the trust, the trust’s remainder beneficiaries argued that the expenses should be paid solely from the trust income.
The Iowa Court of Appeals examined the distribution of property during a divorce where one spouse had used inherited and gifted property to fund the purchase and repay debts associated with the marital home and farmland. The Court of Appeals determined that the funds used on the farmland were exempted from the property division, and ordered the contributed amounts returned to the spouse. The funds used to purchase the marital home were not exempted from the marital property division.
The Iowa Court of Appeals examined the distribution of farmland property during a divorce when a premarital agreement waived “any right or interest in the real property of the other,” and the wife argued that marital assets were used to pay down debt on the property. The court held that the premarital agreement precluded the spouse from receiving credit for any debt payments. The spouse’s request for credit amounted to a claim of interest in the property and she had waived her right to bring this claim in the premarital agreement.
The Iowa Court of Appeals affirmed the dismissal of two neighboring landowners’ claims against each other in a water drainage dispute. For many years, the neighbors had argued about the proper flow of water, eventually using self-help techniques to control the water. The court found that the water flow prior to the self-help techniques determined the appropriate burdens between the parcels. However, it could not order injunctive relief for the dominant parcel because the trial court did not rule on that neighbor’s claim for injunctive relief.
The decedent passed away intestate in Belize. He owned real estate in both Polk County and Belize, several financial accounts, and a life insurance policy. The decedent’s adult daughter petitioned to open an estate in Polk County. His surviving spouse, who is not related to his daughter, filed a motion to dismiss the petition claiming that the decedent had lived in Belize for many years before his death and, as a result, the probate court lacked jurisdiction.
In a recent case, the Iowa Supreme Court considered whether Iowa’s tax-sale redemption notice procedures violated a landowner’s due process rights. The landowner argued that the law was unconstitutional because it did not require personal service, only notice by mail. The Court ruled that due process does not guarantee a property owner actual notice before the government takes the property. Instead, the landowner is entitled to a method of service “reasonably calculated” to provide timely notice.
A recent case from the Iowa Supreme Court highlights the importance of carefully completing and reviewing beneficiary designations for IRAs and other retirement accounts.
In a January 27, 2023, opinion, the Iowa Supreme Court found that a joint tenancy with rights of survivorship was converted to a tenancy in common when one of the owners transferred her undivided interest to a revocable living trust.
On January 9, 2023, the Tax Court found that a ranch-owning couple was entitled to $421,503 in deductions over three years for expenses claimed on their Schedule F, even though they had sold most cattle associated within a few months after the purchase of the property. The IRS had also assessed § 6662(a) accuracy-related penalties for the years, but those were not upheld since the Court determined the taxpayers were entitled to the deductions.
On January 25, 2023, the Iowa Court of Appeals reversed the district court’s order denying damages stemming from a replevin action of farm equipment. After determining that the plaintiffs were the rightful owners, the district court denied the plaintiffs’ request for damages reasoning that the defendant was justified in holding onto the equipment. Although the defendants reasonably claimed to be the rightful owner, the court ultimately determined they were not. Therefore, the plaintiffs were entitled to damages for the illegal detention of the equipment. Iowa Code § 643.17.
As the 2023 filing season begins, taxpayers and their preparers must sort through new guidance and rules to determine their requirements for the 2022 tax year. This post details 10 key considerations for these returns.
Agricultural supply dealer liens—intended to encourage suppliers to provide necessary feed and supplies to agricultural producers—can be difficult to enforce. An opinion issued by the Iowa Supreme Court today illustrates some of the complexity of this remedy. Quality Plus Feeds, Inc. v.
Hunting ground is a precious commodity in Iowa. Hunters often approach landowners looking for ground to hunt. Whether to grant such permission and to whom to grant that permission is a complex decision. This article was originally written in June 2014, and updated in January 2023.
On December 16, 2022, the North Carolina Supreme Court denied an appeal claiming that the state’s Right to Farm Act was unconstitutional. Previously, the North Carolina Court of Appeals had granted the State’s motion to dismiss under the Federal Rules of Civil Procedure Rule 12(b)(6). Rural Empowerment Ass’n for Cmty. Help v. North Carolina, 2021 WL 6014722 (N.C. App. Dec. 21, 2021).
On November 2, 2022, the Iowa Court of Appeals affirmed that a niece who added herself to her aunt’s bank accounts failed to rebut the presumption of undue influence. A transfer from a grantor to their fiduciary is presumptively fraudulent. To refute this, the niece had the burden to show 1) that she acted in good faith and 2) that her aunt acted voluntarily. Because the niece instead presented evidence that undue influence was not established, she failed to meet this burden.
On December 21, 2022, the Iowa Court of Appeals affirmed the district court’s finding that the plaintiffs failed to prove ownership of property under the legal theories of boundary by acquiescence or adverse possession. The plaintiffs claimed that a longstanding fence established the property line, but the court found that was insufficient proof that the fence was a known boundary in a definite location. The plaintiffs’ claim of adverse possession failed because their use of the property was not hostile or under a claim of right. The defendants retained title to the disputed property.
On December 5, 2022, the United States Tax Court found that a farmer who had purchased 29 used tractors over the course of three years did purchase the tractors for legitimate business purposes. Consequently, the farmer’s IRC §179 expense deduction for those tractors was upheld. The taxpayer was also able to substantiate that the majority, but not all, of his pickup trucks were “qualified nonpersonal use vehicles” as defined under IRC §247(i). The Tax Court eliminated most of the accuracy related penalty assessed by IRS under §6662.
On November 2, 2022, the Iowa Court of Appeals affirmed that a sheriff’s sale should not be set aside for failure to record the sheriff’s deed within the statutory time period. See Iowa Code § 654.16A. The purpose of Iowa Code § 654.16A(1) is to give the debtor notice of his right of first refusal. The court held that the debtor did not suffer prejudice because the deed was not recorded in a timely manner and that there was no statutory authority to set aside the sale.
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.