Farm succession planning is an ongoing, educational process
As Greg Dell reviews the three years he and his family have spent developing a succession plan for their Westminster, Md., farm, he remembers how overwhelmed everyone was by the process in the beginning.
"We were like, holy smokes, how are we ever going to be able to do this? It was more than we could wrap our heads around," recalls Dell of the decision to participate in the Farm Journal Legacy Project as a case study family.
However, the Dells quickly learned that they simply needed to start the process and take it one step at a time to achieve the desired success.
The first step in any process is often the hardest, notes Farm Journal succession planning expert Kevin Spafford. But start you must, he encourages, if you want to see your farm survive and thrive in the years ahead.
Spafford says a comprehensive succession plan addresses a variety of factors, including generational transfer with provisions for an ownership transition. The plan should also include provisions for financial security, including each family member’s financial resources, retirement budget, buyout scenario and capital for the transition; leadership development for each management candidate; education, experience and mentor-based development; and provisions to mitigate the estate tax.
It’s important for farm families to understand that their plan is a living document that needs to be updated from time to time. "Life is full of change, challenge and opportunity, and a succession plan must be dynamic to remain relevant," Spafford explains.
An evolving plan. The Dells have certainly learned that lesson. Some aspects of their plan have unfolded as the family had hoped; some have not.
Farm founders Donald and Leona Dell and their son Roger are retired from the farm, though they help out when needed. Roger’s brother, Greg, with support from his wife, Della, provides the leadership for the farm.
The family’s dairy operation is now owned and managed by Greg and Della’s son Gary and his wife, Crystal. Greg and Della’s youngest son, Douglas, is a full-time fireman and provides manpower as needed.
The one huge hole the family is still working through is the heartache of PROJECTlosing Greg and Della’s second son, Tommy, who was killed in a farm accident in 2010. Despite their loss, family members continue to work on their succession plan to build a future for the farm.
After graduating from high school this past spring, fourth-generation member Gregory went to work for a neighboring farmer to gain practical experience apart from his family. In addition, the Dells are developing an employment policy to stipulate job descriptions and responsibilities that reflect their goals and values.
Spafford is advising the Dells to remember that their succession plan also needs to take into consideration the strategic partners outside the family who provide much-needed support to the operation.
"Bankers, input suppliers and consultants all play a part in your success," Spafford says. "They depend on your ability to continue farming, and they have a stake in the outcome."
For more details about the Dell family’s succession planning journey and the tools that have been helpful along the way, visit www.farmjournallegacyproject.com/Dells