In this article, we discuss the process of determining what happens to inherited or gifted farmland in the state of Iowa after a divorce. We cover questions regarding the division of property including: What determines if a property can be divided in Iowa? and How is Farmland Divided in Iowa?
What determines if a property can be divided in Iowa?
Divorce in and of itself is difficult, but if you or your family have a farm, the process is especially difficult. In Iowa, courts handling divorce matters make an “equitable division” of “all property, except inherited property or gifts received by one party.” Gifted or inherited property, what we often see with family farms in Iowa, is considered “non-marital” unless setting aside property is inequitable to the other. The Iowa Supreme Court has established several factors to determine whether gifted or inherited property should be divided. The factors are:
- Whether the parties both contributed towards the care, preservation or improvement of the property
- Whether there was a close relationship between the donor/testator and the spouse
- Whether separate contributions were made by both parties to preserve the economic welfare of the property
- Whether either party has special needs
- Whether it would be plainly unfair to a spouse or child to set aside the property to benefit the other spouse.
If these factors are met, a court could divide the property as marital assets. We can see this in the appellate case In re Marriage of Antoine. No. 0-552/09-1653, 2010 Iowa App. LEXIS 1551 (Iowa Ct. App. Dec. 8, 2010). In this case, the court reviewed the above factors and determined that the gifted farm property the husband had was divisible as marriage assets. The court considered the length of the marriage, the contributions made by the wife in labor and time, and the debt that existed on the property in making their decision. The court noted that the wife had contributed to the improvement of the property, helped farm the property by planting and harvesting, helping with livestock chores, and doing bookkeeping/marketing for the farm.
Because the wife had contributed to the farm, the gifted land was divisible as marital assets.
How is Farmland Divided in Iowa?
Before any decisions are made as to the division of a farm, it must first have a valuation done. The court will need to understand and account for the value of the land, any structures on the land, livestock, farm equipment, crops, vehicles and any other assets associated with the farm operation. Any depreciation and contract valuations will also be considered.
Generally, courts will rarely divide up a farm during the divorce process. It’s in the interest of all parties involved not to split or otherwise break up the farmland as it could significantly harm the business of the farm. In most cases, one spouse will take or keep the farm and the other will receive a larger portion of the other marital assets. Other options, including mortgaging the farm, are also available to keep the farmland together while dividing assets
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