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In this case, the decedent’s wife received Medicaid benefits until the time of her death in 2002. The total amount of benefits received amounted to $153,180.59. No estate was opened for her, and she was survived by her husband, the decedent in this case. He never received any Medicaid benefits and died in 2006. Upon his death, the Missouri Department of Social Services filed a claim against his estate for Medicaid assistance paid to his pre-deceased wife. The trial court dismissed the claim and the state appealed.
On December 10 and 11, both the U.S. House and Senate passed H.R. 7327, the “Worker, Retiree, and Employer Recovery Act of 2008.” The Act makes technical corrections to the Pension Protection Act of 2006 (PPA), and includes a relief measure that waives the requirement for taxpayers age 70 and ½ and older to take a required minimum distribution in 2009. President Bush is signed the Act into law on December 23, 2008.
H.R. 7327, Pub. Law No. 110-458
In the past, a taxpayer could sell a remainder interest in property for remainder interest’s actuarial fair market value, retain a term or life estate, and not trigger gift tax (because the sale was for fair market value, and not have the value of the life estate included in the transferor’s estate at death. But, I.R.C. §2702 and the Regulations now require that gift tax be paid on such arrangements. However, a recent IRS Private Letter Ruling says the prior rules apply when a personal residence is transferred to a qualified personal residence trust (QPRT).
A county ordinance required a two-mile separation between animal waste facilities and occupied residences. In this case, a homeowner appealed the grant of a building permit for the construction of a 960 head hog barn 1.8 miles away. The South Dakota Supreme Court, interpreting the county ordinance, determined that the grant of the building permit was lawful because the facility was a “commercial feedlot” instead of an “animal waste facility.”
In Iowa, the doctrine of “boundary by aquiescence” or “boundary by practical location” is a longstanding legal principle that is routinely addressed by the Iowa courts. The Iowa Code specifies that if adjacent landowners treat a line as the boundary for 10 or more years, that line becomes the true boundary. Minnesota courts have also adopted the legal concept of “boundary by practical location,” but landowners must satisfy a more-lengthy time frame to establish the new boundary- 15 years or more.
Farm lease arrangements can give rise to numerous legal issues. While it is almost always best to have a written agreement so as to minimize the potential legal problems that can arise, a written agreement doesn’t prevent disputes.
In a continuation of a dispute regarding an oil and gas lease, the court reviewed several issues following a final appellate court decision cancelling an oil and gas lease as to two of three lessors. Following the final adjudication of the case cancelling the lease, the two lessors brought suit against the operator/lessee for trespass, conversion, and an accounting of income from gas and oil sales because the lessee continued production on their properties during the appeal of the decision to cancel the lease.
The recent winter weather has caused damage to numerous fences, particularly in western Iowa. Reports have come in that snow completely buried fences in some locations, severely damaging them and allowing livestock to walk out of enclosed pastures. So, a quick review of Iowa law on the rules for rebuilding fences and liability for trespassing livestock is in order.
When a trustee is required to employ the services of an attorney for an action to benefit the trust, the trust can be ordered by the court to pay the attorney fees. In a recent Iowa case there was a dispute between co-trustees regarding declaratory judgment requests and removal of one or more of the trustees. A request for attorney fees was made 47 days following the court’s ruling. The court granted the request and the co-trustee appealed the timeliness of the request.
Under the common law, a fraudulent conveyance can be rescinded. A fraudulent conveyance is established when an owner of the property seeks to place the property beyond the reach of creditors or prejudices the legal or equitable rights of creditors. The court looks for badges of fraud such as inadequate consideration for the conveyance, insolvency of the transferor, and threat of third-party claims.
Minority shareholders in a small, close-held farming corporation are in a precarious position. They have no control over management of the corporation and, for example, can’t force dividends to be paid or force a corporate liquidation. The majority shareholders owe the minority certain fiduciary duties such as acting in good faith, but the majority also has the right to operate the corporation as they see fit under the “business judgment rule.”
A mutual mistake in the formation of a contract is a material mistake of belief not in accord with the facts that exists at the time the parties formed the contract. Generally, a mutual mistake will allow the party adversely affected by the mistake to void the contract unless the party is the one who bears the risk of the mistake such as through allocation in the agreement or the party knows it has limited knowledge. The existence of a mutual mistake must be proven by clear, satisfactory, and convincing evidence.
Creekstone Farms Premium Beef, a small Kansas meatpacker, has sued the USDA for the right to test all of the cattle they slaughter for BSE. USDA bases its authority to deny Creekstone the necessary "kits" to conduct the tests on the Virus-Serum-Toxin Act of 1913.
Download complaint: Creekstonecomplaint.pdf
A federal class action complaint has been filed against Bayer CropScience and Aventis CropScience on the basis that the companies have financially damaged the multi-billion dollar U.S. rice industry by contaminating it with genetically engineered rice that is not approved for human consumption. The complaint seeks damages and an injunction. The case has similarities to the Starlink litigation that was settled in 2003. The case is Parson, et al. v. Bayer Cropscience, et al., No. 4-06-CV-01078 (E.D. Ark. Aug. 28, 2006).
In late September, the USDA instituted a voluntary program with financial incentives designed to control the less deadly form of bird flu in non-breeding poultry.
In recent months, farm tenants have expressed interest in adjusting existing cash rent leases in an attempt to broker some of the risk associated with rising commodity prices and the stave off the possibility that the landlord will raise the cash rental rate. But, there’s a potential problem with fiddling with cash rent leases how might any adjustment impact the way farm program payments are split between the tenant and the landlord?
One-hundred forty-two farmers have filed a federal lawsuit in Texas claiming that the Federal Crop Insurance Corporation along with other insurers cheated and deceived them by using bogus standards of “good farming practices” to deny or reduce Group Risk Insurance Protection claims.
Read the complaint: CropInsurance.pdf
On January 7, 2008, the U.S. Supreme Court declined to hear a case involving Monsanto’s dispute with a farmer over the famer’s use of Monsanto’s patented Roundup Ready soybean seed. Contrary to press reports and Monsanto’s own statements concerning the case, the court did not rule in Monsanto’s favor – they simply refused to hear the appeal. The Supreme Court did not validate Monsanto’s position taken in the case.
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.