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January 10, 2010 | Erin Herbold

Here, a wind storm in 2006 caused significant damage to a farmstead. The property owners submitted claims for damage to a machine shed, grain bin, cattle shed, farm equipment, and their home. The insurance company issued a check for nearly $70,000 for the damage to the farmstead. However, the property owners disagreed with the amount determined by the insurance adjustor, claiming that the damage far exceeded that amount. They subsequently obtained estimates from professionals around the area for the repairs, including a bid for $123,000 for repair work to the family home.

In recent years, in Iowa and elsewhere, courts have been faced with the issue of whether a general farm liability insurance policy containing a “pollution exclusion” clause excludes coverage for death of animals or humans caused by the release of carbon monoxide fumes inside a hog confinement facility.  To date, the majority of courts have said that carbon monoxide is a pollutant covered by such an exclusionary clause.  

November 15, 2010 | Erin Herbold

In this case, a hog buyer could not obtain financing to complete the construction of a hog-buying station, so he transferred the property by warranty deed to another livestock trader in return for the trader’s agreement to borrow the necessary funds. Two weeks later, the unfinished building collapsed under the weight of ice and snow. The Iowa Court of Appeals was faced with the question of whether the hog buyer’s insurer was responsible for the claimed loss of more than $500,000 under the buyer’s builder’s-risk policy.

In 1988, a couple purchased a home for $34,000. Over the next ten years, they spent $40,000 remodeling and updating the home. In 1998, they purchased a farm/ranch insurance policy with $90,000 coverage for the home and an additional $53,000 for personal property. The policy included inflation protection. Years later, they added a sunroom onto the home, but did not increase the policy coverage on their home. In 2006, the home burned down, resulting in a total loss for the homeowners.

It is vital for any claim under an insurance policy that the insured comply with the specific policy terms. Failing to comply can result in the inability to legally dispute the denial of a claim. In the following case, the plaintiff failed to comply with a shortened limitations period for bringing legal suit under his homeowner’s policy and found himself without recourse when he suffered a loss. 

Typically, beneficiary designations for life insurance policies and other direct distribution accounts must be in writing to be enforced. In this case, the Iowa Supreme Court changes the requirement and allows purported beneficiaries to now bring an action against the decedent’s insurance agent for his purported failure to ensure a verbal statement made by a decedent indicating a desire to change a beneficiary designation of an insurance policy is carried out or face liability for the resulting loss by the beneficiary.

December 6, 2012 | Erika Eckley and Roger McEowen

Insurance policies typically exclude coverage for certain events or circumstances. The exclusionary language, however, must be clear and explicit. In addition, if the insurance claims coverage for an event or occurrence involving the exclusionary language, the burden is on the insurance company to demonstrate that the exclusion applies to the insured’s circumstances. If there is any ambiguity in the insurance contract requiring interpretation of the meaning, the court will adopt the meaning most favorable to the insured.

It is often the case that, at the time of death, the deceased spouse wants to benefit the surviving spouse for life and then have the property pass to the children. This is particularly the case in an ag estate. But,  what if there is indebtedness still owing on the farm land at the time of death of the first spouse and the farmland is left to the surviving spouse for life with a remainder to the children - is that the surviving spouse’s responsibility or the responsibility of the children as the remaindermen? That was the issue in this case.

Medicaid is the joint federal/state program that pays for long-term care in a nursing home. But, to receive Medicaid benefits, the recipient can have only a very minimal level of assets and other income. Also, effective July 1, 1994, Iowa established an estate recovery program that authorizes the state (Iowa Dept. of Human Services) to recoup Medicaid payments from estates of recipients. Recovery is available from assets in the Medicaid recipient’s estate.

April 3, 2006 | Roger McEowen

While the death of a family member typically causes enough grief of its own, in some situations family squabbles arising after the death of a loved-one can be worse (and can drag on for years). That was what happened in this case. Here, family members fought over their mother’s estate for more than five years in three separate lawsuits.

An attorney is entitled to a reasonable fee for handling a decedent’s estate. But, what is reasonable? Certainly, a “reasonable” fee depends on one’s perspective - whether you are the party charging the fee or the party responsible for paying the fee. In any event, many non-lawyers seem to have great concern about the amount of fees an attorney might charge for handling an estate - commonly known as the probate fee. But, is the attorney’s fee something to dread? The issue of reasonableness of an attorney’s probate fee was at issue in this case.  

When there is suspicion that a decedent has been influenced by someone else in the disposition of their property upon death, a challenge to the will may be made by those affected by the disposition. Basically, the claim is that the decedent’s will was not an expression of their own free will. This case represented a challenge to a will based on the alleged undue influence of the decedent’s spouse.

May 9, 2007 | Roger McEowen

The distribution of property in accordance with a decedent’s will or trust can be a straightforward matter, or it can prove to be a trying event for the family. But, what if, for example, a parent dies and specifies in a will that a particular family member is to get a particular item of property and it doesn’t exist at the time of death?  When that happens, the legal doctrine of ademption is invoked. That’s what this case involves.

Like a contract, the terms of a will are strictly construed by most courts. The intent of the person executing the will is the “polestar.” Most courts determine intent from a plain reading of the language in the properly executed will. In this case, a son challenged a trial court ruling that he was ineligible to purchase stock options under his mother’s will, because he had failed to comply with the accelerated procedures set forth in the terms of the will. The Iowa Court of Appeals found that the son had forfeited his rights under the will by his non-compliance with the time frame. 

Disagreements sometimes arise when a family member dies and the survivors are left to handle the distribution of the estate.  This can particularly be the case when one of the family members is the executor of the estate and also stands to receive a part of the inheritance. A claim of self-dealing could arise – the other family members may view what the executor does as taking advantage of his position and acting for his own interests rather than the interest of the estate and the other beneficiaries.  That’s what was involved in this case.
            

A trust is a legal relationship where one person, the trustee, holds assets for the benefit of another person, a beneficiary.  A constructive trust is one type of trust.  Instead of being created expressly and intentionally by a settler, a constructive trust arises by operation of law as a response to certain events.  It’s basically an equitable device that’s used to prevent one party from taking advantage of another party.  For example, if one party steals another party’s car and trades it for a pick-up, the party that stole the car will obtain legal title to the pick-up.  But, the other p

Many estate plans provide for the creation of a trust for the benefit of the surviving spouse, with the trust property ultimately passing to the children upon the surviving spouse’s death.  Typically, a child or several children are named as “Trustee.”  Usually, no problems are encountered as the trustees administer the trust for the benefit of the surviving spouse, or in distributing the trust’s assets and income after the surviving spouse dies.  But, sometimes problems arise.  That’s what this case is all about.

 

Note: This case has been distinguished by In re Estate of Myers, No. 11-1378, 2012 Iowa Sup. LEXIS 99 (Iowa Sup. Ct. Nov. 2, 2012) (interpreting amended Iowa Code §633.238 to not apply to payable-on-death accounts, a form of tentative trust known as a "Totten trust" ).

May 19, 2008 | Roger McEowen

The law of wills has some interesting components.  Two of those involve the concepts of lapse and anti-lapse – complementary concepts that address the disposition of property that is willed to someone who dies before the testator.  Under the common law, if a beneficiary under a will died before the testator and was to get part or all of the testator’s residuary estate, then that property would pass by intestate succession – just as if the testator had left no will.  That’s known as the “no residue of a residue” rule – the portion of the residuary estate that did not pass itself under the wi

The rule is well settled – a person trying to set aside a will must have clear and convincing evidence that the will was the product of undue influence.   But, if the challenger has clear and convincing evidence that the person alleged to have exerted undue influence over the testator was in a confidential relationship with the testator, that person is presumed to have unduly influenced the testator and must show that they acted in good faith and that the testator acted on their own volition.  These principles were involved in this case – a case made juicier because it involved the decedent

In Iowa, the general rule is that the executor of a decedent’s estate bears the burden of proof if the estate’s final report is challenged.  However, once the executor offers evidence to support the executor’s decisions, a party challenging the final report will have a difficult time prevailing.  In any event, a party challenging estate administration must have standing to sue the executor.  Generally, that means the challenger must be a person or entity specifically named in the decedent’s will or trust. 
  

September 2, 2008 | Roger McEowen

A common estate planning technique is for the value of marital assets to be split evenly between the spouses during life.  That is typically accomplished by the re-titling of assets into tenants in common ownership.  The result is that each spouse owns an undivided one-half interest in each asset titled in tenancy in common with one-half of the asset’s value being included in the spouse’s estate at death.  In addition, tenancy in common ownership allows the decedent to specify in their will who will inherit their undivided one-half interest.  That’s an important point when federal estate ta

September 2, 2008 | Roger McEowen

Transfers by will can be set aside if they are the result of undue influence as the result of a confidential relationship between the decedent and the person receiving the transferred property.  That concept was involved in this case.

October 6, 2008 | Erin Herbold

Estate settlement can be a long and drawn-out process when there’s a family feud. Under Iowa law, a surviving spouse is entitled to a statutory share of the estate by election. But, the election must be properly made. That was the issue in this case. 

November 18, 2008 | Roger McEowen

A person who takes the time to execute a will does so with the general expectation that the person’s assets will be disposed of at death in accordance with the person’s wishes as set forth in the will.  That’s why it is suggested that a lawyer carefully draft the language in the will to make it clear how the decedent wants their assets to pass at death.  But…then there is this case.

In Iowa, estate administration is a relatively streamlined, inexpensive process.  For most estates, the attorney fee is generally a routine two percent of the gross estate.  In many instances, that may be less than the cost associated with the funeral.  But, the attorney fee can be more if the family wants to fight.  This case illustrates that point.

November 18, 2008 | Roger McEowen

One of the greatest “privileges” of being a parent is the ability to disinherit a child.  Some have also tried that technique with respect to a spouse.  It used to work by placing assets in a revocable trust and naming someone other than the spouse as the beneficiary.  But, the Iowa courts put the clamps on that technique in recent years.  If one spouse executes a will that doesn’t provide for the surviving spouse (or doesn’t provide a sufficient amount for the survivor), the surviving spouse can claim a share of assets against the will.  In Iowa, the “spousal share” is one-third of the est

When a divorce occurs and property is split between the ex-spouses, interesting issues can arise.  The property division can be important for numerous reasons, not the least of which involves tax issues associated with particular assets in the hands of each former spouse.  Sometimes a question can arise as to spousal rights to property, as it did in this case.

January 5, 2010 | Roger McEowen

There are basic principles of estate planning – proper titling of property during life, balancing property ownership between the spouses if federal taxation could come into play, and utilization of annual exclusion gifts to manage estate size and pass interests in the farming or other family business operation during life, just to name a few.  If gifting is utilized, the donor must be prepared to part with the property and understand that once the property is gifted it is gone.  Estate planning can be as complex or as simple as necessary to carry out the goals and objectives of the family. 

When it comes to probate matters, the law is clear on a couple of points – (1) a spouse cannot be disinherited; and (2) a child can be disinherited.  While one spouse can execute a will that leaves the other spouse nothing, the surviving spouse has a statutory right to receive a portion of the deceased spouse’s estate.  But, it is possible for both spouses to contractually agree to limit or eliminate a surviving spouse’s inheritance.  That’s certainly the case if such a contract is entered into prior to marriage.  In that case, the contract is known as a prenuptial (premarital) agreement. 

April 16, 2009 | Roger McEowen

Medicaid is the joint federal-state program that provides taxpayer-funded support for long-term health care.  To be eligible for Medicaid, a person can have only a very limited amount of income and resources available.  Excess amounts must be spent down to a prescribed level before Medicaid eligibility is achieved.  An entire area of legal practice has emerged in recent years focusing on techniques that can be used to achieve Medicaid eligibility and preserve assets.  One of those techniques may involve the use of a trust.  But, can a state assert its right to enforce a lien for Medicaid be

In Iowa, to prove the existence of a lawful common law marriage, there must be substantial evidence of a present intent and agreement to be married, continuous cohabitation, and a public declaration that the parties are husband and wife (or, now, wife and wife, or husband and husband or “Party A” and “Party B”).  Here, a male/female couple met in 1993 and cohabitated continuously until the time of the man’s death in 2006. At the time the couple met, the man was married to a woman who was suffering from a brain tumor and was confined to a nursing home, unable to recognize him.

Medicaid is the joint federal/state program that funds long-term health care.  To be eligible for benefits under the program, however, an applicant for benefits can have only a very limited amount of income and resources.  So, to avoid having assets and resources “spent down” to become eligible for Medicaid benefits, one strategy is for the person who is anticipating a future need for long-term health care to transfer the assets to family members well in advance of making an application for Medicaid.  Long-term health care planning is complex, but for many people it’s an important part of t

When an estate is opened in Iowa, the appointed executors must take an oath to the court to accept the duty of a fiduciary- meaning that an executor must “manage an estate with the level of care an ordinary prudent person would exercise under like circumstances in their own affairs.” Under Iowa Code § 633.160, a fiduciary is liable for “negligent or willful acts or nonfeasance in the fiduciary’s administration of the estate by which loss to the estate arises.” 

Estate planning, land contracts, transfer of management and wealth, and buy-sell agreements are all components of a good succession plan. In order to successfully transfer the family farm to the next generation, the parties involved should have a specific plan in place. This case demonstrates the need for a viable succession plan and the damage that lack of communication can do to family relationships. 

Revocable trusts can be used as a part of an effective estate plan. Most often, the trustee is the trust creator and may seek to amend or invalidate the trust during their life. However, a provision is usually included for a successor trustee to take over the trust administration in the event the trustee lacks the capacity. Here, a mother executed a will in 1999 that left her property in equal shares to her three children.

Here, a father of seventeen children executed a trust agreement the day before his death, appointing his wife and two sons as trustees. The trust document directed that upon the death of the man’s wife, the remaining trustees were to divide the “residuary trust” in equal shares and distribute those shares to the man’s living children. Although all of the children were not specifically mentioned in the trust document, a list of all seventeen children was included in an attachment to the trust document.

August 26, 2009 | Erin Herbold

In Iowa, an executor of an estate must generally provide an accounting of all income and disbursements made during the probate process. However, if all parties agree, that requirement can be waived (Iowa Code §633.477(9)). 

The Iowa Code specifies the maximum amount of “ordinary” fees that can be paid to an attorney for the administration of an estate (Iowa Code §§ 633.197 and 633.198). The law requires that the attorney be allowed “such reasonable fees as may be determined by the court, for services rendered.”  In addition, the fees must not exceed the rate set out in the Iowa Code which corresponds to the “gross assets of the estate listed in the probate inventory.”

October 9, 2010 | Erin Herbold

Upon the testator’s death in 2001, his will was admitted to probate. A subsequent dispute arose amongst the testator’s siblings over the sale of the estate’s assets. The executors filed a final report which the trial court approved in 2002.  However, the court noted that there were some issues remaining to be dealt with before the estate would be closed, including filing a federal estate tax closing letter and obtaining an inheritance tax clearance from the Iowa Department of Revenue (IDOR). 

Here, parents owned 120 acres of Iowa farmland in Davis County in joint tenancy with rights of survivorship. When the father passed away, the mother deeded her survivorship interest in the land to her five children as tenants in common. Three of the children disclaimed their interest, causing their interests to pass to the remaining siblings- two brothers. In 2002, deeds were executed with 30 acres going to the first brother and 90 acres going to the second brother. It was here that the confusion began.

A mother died owning Iowa farmland and her will appointed her youngest son as executor.  Her will also gave the executor the right to purchase farmland from the estate for its value for Iowa Inheritance Tax purposes (interest rate was set at rate equal to rate charged by Farm Credit Services on real estate mortgages in the county). The executor and the estate’s attorney chose an appraiser for the property. The appraiser was informed that the appraisal was for estate and inheritance tax purposes, but did not know that the executor had the chance to purchase the property.

January 10, 2010 | Erin Herbold

A challenge to the validity of a will often comes in the form of a concerned party accusing another party of imposing their will on the testator.  Typically, such scenarios arise when the one party has a close relationship with or a position of authority over the testator.  Here, the parents had three children- one son and two daughters. The mother was estranged from one of the daughters as a result of a “physical altercation.”  When the other daughter passed away, the remaining daughter reconnected with her mother.

January 20, 2010 | Erin Herbold

In this case, the trial court dismissed an executor’s claims that the decedent’s daughter had committed constructive fraud by abusing a confidential relationship and exerting undue influence over her father.  The daughter helped her parents as they aged by managing their finances and helping them with errands. In July 2001, the mother transferred money to her daughter to pay her parent’s expenses. The mother died in September 2001, and the father executed a new power of attorney, naming his daughter as agent. 

Here, a father died with an insurance policy benefitting his second wife. The father’s two sons brought suit against his estate claiming asking that the change of beneficiary designation on his life insurance policy to their step-mother be set aside because of undue influence.  The father had been married to the sons’ mother for 49 years until her death in 2002.  After she died, the father experienced health problems, including blindness and heart problems.  He then married a former high school classmate who took over his daily care and was his companion. 

January 20, 2010 | Erin Herbold

A son challenged his disqualification as a nominated executor of his mother’s estate.  The mother passed away in Feb. 2009 appointing her son as the executor. However, before she died, the son’s relationship with his mother and his siblings was strained to the point that he did not even attend her funeral.

Long-term health care planning often involves the use of trusts to provide a stream of income for a family member in need of long-term care and preserve trust assets for other family members upon the death of the person in need of care.  This case involved a determination as to  whether a particular trust was a "discretionary trust with standards" and, if so, what effect Iowa Code section 633A.4702 (2007) had on the Iowa Department of Human Services' (DHS's) right to recover Medicaid benefits from the corpus of that trust after the beneficiary’s death.  

Here, the lawsuits (10 in all) began with a struggle among family members concerning the administration of their mother’s estate and their father’s estate plan. In 2001, the trial court ordered the children to cease interfering with the disposition of their parents’ property.  Any party that violated the court’s order would forfeit their right to receive any property under their father’s will. 

March 1, 2010 | Erin Herbold

When drafting estate planning documents for clients, an attorney is only liable for malpractice to the client, not potential beneficiaries or heirs.

It is a common estate planning tool for a revocable trust to be accompanied with a pour-over will to ensure that all of the decedent’s property ends up in the trust at death. Here, a mother executed a revocable living trust and transferred some of her assets to the trust during her life. She died in 2006, owning an 80-acre parcel of farmland and survived by three grown daughters - two living out of state.  The Iowa daughter was named trustee.  The 80 acres was never transferred to the trust, but Mom’s will devised the residuary of her estate to the trust. 

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