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With respect to a decedent’s will, sometimes affected  parties may try to argue that provisions are ambiguous in an effort to try to rewrite terms of the will, inquire into the wisdom of the distribution, or implement principles of equity and justice. If the language of a will is clear and unambiguous, however, the court is supposed to implement the distribution as declared in the will. Normally, admission of extrinsic evidence is not permitted.

In every marriage dissolution case, marital property must be distributed between the parties.  Every state has adopted some form of property distribution which requires courts to determine each spouse’s share of marital assets. 

In order to sue for breach of contract, a claimant must be a party to the contract, be an intended beneficiary of the contract, or have sufficient privity with the other party to the contract. Without this, the claimant does not have sufficient rights to the outcome of the contract to bring a claim.

March 1, 2013 | Roger McEowen

During March there were several major developments in the courts and with the IRS that are important to pay attention to.  We highlight those in the case and rulings annotations list on the website and draw your attention to them here.

The bedrock principle of all probate matters is that the decedent’s intent controls. In this case, the Iowa Supreme Court determined that the legislature expressly overturned this principle in regards to the disposition of a decedent’s remains and that the decedent’s wishes as expressed in her will could be disregarded.

February 22, 2013 | Roger McEowen

It’s been a rough few weeks for proponents of commercial wind farming.  In September 2009, a major technical publication written by a European scientist entitled, “The Wind Farm Scam” was published which makes many points based in science, engineering, physics and mathematics to reach the conclusion that wind farms are in reality nothing more than the outgrowth of politics and favorable tax subsidies that support the industry.  Then, in October, the Kansas Supreme Court unanimously upheld a county’s ban on commercial wind farm development, citing numerous adverse effects of commercial wind

In Iowa, when a couple divorces, marital property must be equitably distributed during the dissolution process. In determining what is equitable, the court looks at several factors. These include the length of the marriage, the parties’ contributions to the improvement of property, whether the property was the family home and provided a source of livelihood for the family, and the parties’ ability to support themselves after the separation. Typically, though, property inherited by one party is not considered marital property.

The most basic premise of Iowa’s legal system is procedural due process. Any time the state acts or threatens to act to deprive a person of a protected liberty or property interest, the state must provide notice reasonably calculated to apprise the person of the action to be taken and provide an opportunity for the person to present his or her objections. In a recent case, the Iowa Court of Appeals was asked to review the procedural propriety of a judgment entered by the court against an individual for his role as executor of his mother’s estate.

February 18, 2013 | Roger McEowen
February 6, 2013 | Erika Eckley

In a recent Iowa Supreme Court case, the court was tasked with determining whether a drainage tile buried 6.62 feet below the surface and running underneath a railroad track is a “culvert” under Iowa’s Levee and Drainage Districts and Improvements statute such that a railroad has the responsibility to repair.

The plaintiffs, a married couple, operated a small farming business and borrowed money to build a small hog facility that was ultimately constructed 120 feet from their home.  After the building was constructed, they began contract-feeding pigs for another party.  The contract with the pigs’ owner required the plaintiffs to feed, care for, and manage the pigs supplied to them. They were also required to maintain insurance on the building and hogs, and ensure coverage in the event of suffocation of the animals.

February 1, 2013 | Roger McEowen

During February, there were several important and interesting developments involving agricultural law and taxation both nationally and in Iowa.  At the state level, the Iowa Supreme Court continued to issue interesting decisions on several fronts.  

In Iowa, the owner of an upper or dominant estate has a legal easement over the lower or servient estate for the natural drainage of water. The servient estate has a duty to accept this flow of water and cannot take measures to prevent it.

The doctrine of res judicata prevents the continued litigation of an issue previously resolved through the court system. The concepts of issue preclusion and claim preclusion are both included in the doctrine. Issue preclusion prevents the relitigation of issues in a second action when the issues were previously raised and decided in another action. Claim preclusion bars a second legal action on a claim in which a valid and final judgment had already been issued.

When a person holds property that was intended to be transferred to another person, the court can create judicial remedies to ensure an equitable resolution and facilitate the transfer of the property to the intended person. Two remedies recently used by the court involved the establishment of a constructive trust and a resulting trust. A constructive trust is created when the holder of property is determined to be the trustee for the benefit of another who is entitled to an interest in the property.

A revocable trust is owned by the settlor of the trust.  The trustee, if different from the settlor, owes a fiduciary duty to the settlor.  The beneficiaries of a revocable trust have no ownership interest or right to any accounting of the trust assets until after the settlor’s death.  This is because the settlor, as the owner, can terminate the trust at any time. Once the settlor dies, however, the trust becomes irrevocable and the named beneficiaries now have a right to an accounting and the trustee owes a duty to the beneficiaries to administer the trust in their best interests.

This lawsuit arose out of a child’s allergy to tree nuts and involved the issue of whether such an allergy is a disability under Iowa’s Civil Rights Act. The problem arose when the plaintiff tried to enroll her daughter in a child care center. The plaintiff’s daughter had a severe tree nut allergy and the mother detailed an emergency care plan with the center’s management.

January 18, 2013 was a big day as far as tax is concerned.  In one development, the federal district court for the District of Columbia issued an injunction against the new IRS preparer regulations that had been in the works since 2011.  Those regulations created a new classification of tax preparer – the Registered Tax Return Preparer (RTRP).  An RTRP is someone other than an enrolled agent who is a non-attorney, non-CPA preparer that prepares tax returns for compensation.  The new regulations required RTRPs to register with the Treasury, pass a “competency” exam, complete 15 hours of cont

Typically, the relationship between an attorney and a client and the extent of the representation is pretty straightforward. Issues can arise, however, when clients have multiple roles that may create conflicts of interest in the representation.

January 7, 2013 | Roger McEowen

On January 1, the U.S. Senate finally took up H.R. 8 which had passed the U.S. House in late July.  The Senate renamed the bill as “The American Taxpayer Relief Act of 2012” and made changes to it and shipped it back to the House.  The House approved the changes late on January 1.  The President signed the legislation into law on January 2, 2013.

January 4, 2013 | Roger McEowen

We begin 2013 with our annual look at the most significant agricultural law developments of the previous year. Legal issues continue to be at the forefront of developments that are shaping the present and future of American agriculture, and it is very likely that the involvement of the legal system in agriculture will continue to grow. The following is my list of what I view as the top ten agricultural law developments of 2012 based on their impact (or potential impact) on U.S. agricultural producers and the sector as a whole.

January 2, 2013 | Roger McEowen

Over the past month, there have been several significant developments of importance to farmer, ranchers, agribusinesses and the professionals that represent them.  In early January we posted our annual article on the Top Ten agricultural and tax developments from 2012.  If you haven’t done so already, take a look at the cases and rulings highlighted in that publication.  There were some big developments in 2012. 

December 3, 2012 | Roger McEowen

Tax legislation signed into law on January 2 (The American Taxpayer Relief Act of 2012) makes permanent some very significant provisions of EGTRRA enacted in 2001.  The Act also extends some provisions that had either already expired at the end of 2011 or expired at the end of 2012.


Surviving spouses who receive little to no property from their deceased spouse under the terms of the will can choose to take an elective share of the deceased spouse’s estate. Typically, the spouse can receive one-third of the decedent’s real property, all exempt personal property held as head of the family, and one-third of other personal property not necessary for payment of debts and other charges. The Iowa Supreme Court in Sieh v.

October 12, 2012 | Roger McEowen

In mid-December of 2010, the Congress passed and the President signed into law the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” (Act).  The Act contains the most significant changes to transfer taxes (estate, gift and generation-skipping tax) in decades. The changes are so significant that standard estate planning techniques may no longer be necessary.

September 28, 2012 | Roger McEowen
September 21, 2012 | Roger McEowen and Joe Kristan

The United States Court of Appeals for the Eighth Circuit has affirmed the Tax Court in a case involving the “charitable lid” estate planning technique utilized with intervivos defined-value transfers – a technique that effectively caps an estate’s tax liability.  The Tax Court, in a decision filed three weeks after the Eighth Circuit’s opinion, blessed the technique in a gift tax case.   In mid-2011, the Tax Court upheld the concept in another gift tax case. 

A garnishment proceeding is a method by which a judgment creditor can collect money owed by the judgment debtor directly from a third party who holds the debtor’s property (a garnishee). The proceeding is only effective to the extent of the debtor’s interest in the property attached. 

When an administrative appeals process is outlined in a statute, a party is required to exhaust his administrative appeals before seeking judicial review of the matter. Failing to exhaust administrative appeals before filing suit in court almost always means the party has waived his right to appeal administrative decisions to a trial judge.

Twenty-six years after the Tax Reform Act of 1986 made important changes to the Internal Revenue Code concerning the definition of property that qualifies for expense method depreciation (I.R.C. §179), the Chief Counsel’s Office of IRS has finally recognized that those changes allow vineyards (and, by analogy, orchards and groves) to qualify for I.R.C. §179.  The change is certainly welcome, and conforms the IRS position to what some practitioners had thought was the proper approach since the key statutory changes took effect.  The key point is that the IRS now agrees that I.R.C.

August 24, 2012 | Roger McEowen

The IRS has released a draft of Form 706 which for the first time addresses the portability of a deceased spouse's unused exclusion - the deceased spousal unused exclusion amount (DSUEA).  While Form 706 must be filed in the estate of the first spouse to die (in 2011 or 2012) to make the portability election so that the unused portion of the exclusion can be used in the surviving spouse's estate (if the surviving spouse also dies in 2011 or 2012), Part 6, Section A contains a box that the executor can check to opt out of the election.  This opt-out provision will be necessary when an estate

The drought in significant parts of the country during the summer of 2012 has raised a number of tax and law-related questions for farmers and ranchers.  Those questions involve the ability to defer crop insurance proceeds, the tax rules associated with sales of livestock on account of drought, and the inability to fill forward grain contracts due to lack of crop.  The law contains special rules for farmers in each situation, but those rules can be complicated and must be followed to obtain any associated favorable treatment.

August 3, 2012 | Erin Herbold and Erika Eckley

The Florida Court of Appeals has held that a Florida Department of Agriculture and Consumer Services (DACS) rule requiring the destruction of healthy trees within 1,900 feet of trees infected with citrus canker amounts to a taking of private property, and required the state to pay a multi-million dollar judgment to the affected landowners.   The case is striking for how the court viewed the agency action, and the court’s respect for property rights.

Recently, a Colorado district court judge issued a permanent injunction establishing a setback limit for spraying pesticide on an individual’s property to prevent potential pesticide drift onto a neighbor’s land. Originally, the neighbors filed a complaint with the Colorado Department of Agriculture (CDA) regarding the defendants’ improper use of pesticide. The CDA issued a “cease and desist” order until the defendants were in compliance with state law. Afterward, a temporary restraining order was granted when the civil suit was filed.

On June 15, the IRS issued temporary regulations concerning portability of the amount of the unused federal estate tax exemption at the death of the first spouse – known as the “deceased spousal unused exclusion amount” (DSUEA).

The present interest annual exclusion is a key component of the federal gift tax.  The exclusion is presently $13,000 per donee per year.  That means that a donor can make gifts of up to $13,000 per year per donee (in cash or an equivalent amount of property) without triggering any gift tax, and without any need to file Form 709 – the federal gift tax return.

Real estate transferor in Iowa must file a Groundwater Hazard Statement with the County Recorder for the County in which the property is located.  The statement provides information to the buyer (as well as others) with respect to the specific types of known hazards on the property.   County Recorders typically time-stamp Groundwater Hazard Statements when filed and give them instrument numbers so that they can be included in the county real estate indexes.  This process allows the Iowa Department of Natural Resources (DNR) to access the forms as part of the Iowa Land Records, and saves the

The Colorado Supreme Court recently made a monumental decision in two related cases potentially affecting water rights for agricultural operations and other rural landowners. While the specific legal issue decided in each case was narrow, the ultimate effect of the two cases could significantly impact Colorado’s entire water allocation system.

Attorney fees in any legal proceeding are only awarded when there is statutory or contractual authority for the award. In probate proceedings, Iowa Code Chapter 633 establishes, upon proof of the work done, the ordinary fees that may be granted to attorneys for their work in settling an estate. Attorneys who tackle complex and unusual cases may request extraordinary fees for work done on these issues. Attorney fee awards must be approved by the probate court after proof of the ordinary (and extraordinary) work done on behalf of the estate.

Kansas towns and cities can, pursuant to their statutory “home rule” power, enact ordinances to resolve issues affecting public health and safety.  This authority, however, is not unlimited.  Towns and cities that enact such ordinances must ensure they are constitutionally sound. One way in which local regulations may be questioned is when there is a lack of objective and defined standards that give fair notice to all residents of conduct that will violate the ordinance.

“We’re Number One, We’re Number One!” While that doesn’t apply to the Cyclones, Panthers, Bulldogs or the Hawkeyes, it does apply to Iowa’s corporate income tax – it’s the highest stated rate in the nation. Now, the Iowa Supreme Court has held that the tax applies to royalties received by a company that has no assets or employees in Iowa. As a result of the Court’s decision, the Iowa Department of Revenue (IDOR) has taken an even more aggressive stance against out-of-state businesses.

March 29, 2012 | Roger McEowen

We begin 2011 with our annual look at the most significant agricultural law developments of the previous year.  Legal issues continue to be at the forefront of developments that are shaping the present and future of American agriculture, and it is very likely that the involvement of the legal system in agriculture will continue to grow.  The following is my list of what I view as the top ten agricultural law developments of 2011 based on their impact (or potential impact) on U.S. agricultural producers and the sector as a whole.

March 23, 2012 | Roger McEowen

Estate planning is an important process that concerns the disposition of one’s property at death as well as by gift (or sale) to specified individuals and organizations during life.  It’s an important process to engage in, but it can also be a difficult process to get started and execute properly once it has started.  Complicating matters is that estate planning is unique to the individuals involved – there is no such thing as a “one size fits all” estate plan.  That means that proper estate planning is tied to the goals and objectives of the parties involved.

The Tax Reform Act of 1976 provided a legislative solution to the perceived problem facing rural landowners of having their estates taxed on the basis of fair market value, and the ability of the Internal Revenue Service (IRS) to use fluctuating values in agricultural land markets to their advantage.  That solution, in the form of the enactment of I.R.C.

Last fall, we covered Watson v. United States, at the tax schools. That’s the case involving the question of reasonable compensation in an S corporation – the issue that former Senator and Presidential candidate John Edwards has become the poster child for. He ran his law practice through an S corporation and took the majority of his earnings out of the S corporation in the form of distributions that aren’t subject to payroll tax. Warren Buffet does the same thing with his company, Berkshire Hathaway.

In this case, the court was asked to determine whether there was acquiescence in a previously existing fence line establishing a boundary between adjoining property owners who were bound by a written fence agreement.