The Dell family was lost. Although the road to farm succession was paved with good intentions, trips to accountants and attorneys had always ended in more confusion than direction for the Westminster, Md., farm family.
That was then. Today, after months of work, the mechanism has been put in place for two family members to retire. A chunk of the dairy herd has been sold. In addition, a new attorney has been retained to write up the proper buy/sell agreements. The first steps have been taken to formally
include the next generation of Dells into the operation.
Whew … what happened? The Dells started their journey as a case study family in the Farm Journal Legacy Project last year. As a critical first step in the process, Kevin Spafford and his Legacy Project team prepared a written plan that chipped away at the family's succession issues one generation at a time and helped reduce indecision and frustration.
This is the second in a series of reports that will chronicle the family's implementation of their farm transition plan.
The beginning. When we met the Dell family for the first time a year ago, we found them struggling to incorporate the hopes and dreams of four generations and six separate families ("Meet the Farmers in the Dell,” Summer 2009).
Strong emotions and fear of change were hampering the business. The depressed dairy market was putting financial pressure on the farm. Some partners wanted to abandon the dairy and others wanted to save it. Land purchased with development plans was being questioned in view of the down housing market. The division-of-labor lines were starting to blur and different personalities were beginning to interfere with decision making.
"We were all still physically working hard at our respective farm jobs and all still respected each other,” says Greg Dell, one of the two sons in the second generation. "At the same time, we were all afraid of change and, ironically, the inability to find a way to change was eating away at us.”
One step at a time. Fortunately, behind those fears were hard numbers. Each family member did his or her homework to provide the Legacy Project team with the figures necessary to reveal a complete picture of the farm's financial health. Professional appraisals are often needed during this part of the planning stage to establish realistic values of what the farm is worth and to set up meaningful cash flows and budgets.
"Our main interest is to support the integrity of the operation and meet the family's transition goals,” Spafford says. "Succession planning must enhance the family's financial security.”
When the Dell family came to the table together, they were united in some goals and divided in others.
- March 2010