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A recent opinion from the Iowa Court of Appeals reminds us of the importance of written plans for family farming businesses.
In a June 10 decision, the Iowa Court of Appeals turned away claims by a son that he was entitled to receive all of his deceased father’s farmland, despite a will provision leaving the property in equal shares to the son and his three siblings. The court did not address the question of whether the son was allowed to raise his promissory estoppel claim in a probate proceeding, but instead agreed with the district court that the son had failed to prove his claim.
The son had farmed with his father for 25 years. When the father died, his will left one-half of his machinery, livestock, grain, crops and inventory to the son. The will left the other half of the personal property to his three non-farming children. The will also left the real property, including the farmland and the homestead, to the father’s four children (including the son) in equal shares. The will gave the son the right of first refusal to purchase the real estate.
After his father’s death, the son filed claims against the probate estate alleging that he was entitled to all of the farmland. He based his claim on a promissory estoppel theory contending that his parents had promised him the farmland and that he had detrimentally relied on that promise.
The district court denied the son’s claims, and the Iowa Court of Appeals affirmed.
On appeal, the estate alleged that the promissory estate estoppel were not even permitted in a probate proceeding. The court, however, chose not to rule on that issue. Instead, the court found that even if the claims were permitted, the son had failed to prove them.
The court agreed with the district court’s findings, including the ruling that there was no proven clear and definite promise. There was no evidence that the father had promised the son the farmland without payment. The will did grant the son the first right to acquire the farmland. He just had to pay for it.
The court also agreed that there was no evidence that the son was entitled to reimbursement for any of his investments in machinery or buildings throughout the years.
This case, while legally straightforward, highlights the need for family members to document their business arrangements in writing. A written business or succession plan can serve to ward off surprises and family litigation down the road.
In the Matter of the Estate of Beitz, No. 14-1492 (Iowa Ct. App. June 10, 2015)
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