A wise parent does not prepare the path for the child, but instead prepares the child for the path. That’s the learned perspective of Chet and Lori Esther of Beardstown, Ill., founders of Esther Family Farming Company (EFFCO).
The Esthers spent 30 years raising a family and building a profitable 4,700-acre grain operation, a construction company and a semi truck and trailer dealership. Now the family is eager to begin the journey of transitioning the multiple-entity business to the next generation. The Esther family was selected to be included in the Farm Journal Legacy Project.
At just 51 years old, some might say farm founder Chet Esther is too young to retire. But while continuing his active business-leader life (he currently serves on the board for Growmark Inc., a regional cooperative, and Two Rivers FS, Inc., a local farm service company), he hopes to retire by age 55 and remain a "helpful hired hand."
Chet’s career began in high school, when his dad gave him 13 acres as an FFA project. He and his brother, Joe, each inherited 600 acres when their parents passed away 20 years ago. These acres formed the foundation for EFFCO, which now includes 2,000 acres owned by Chet and his wife, Lori.
Lori has spent the past 30 years raising the family and keeping books for the farm. She recently retired, handing over the book work to a full-time secretary.
Sons Ryan (33) and Chad (30) now live on the farm. Ryan is married to Erin and they have two daughters. Chad and wife Tanya have one young daughter.
SONS COME HOME. At first blush, the succession plan seems straightforward: Use the proper estate planning and succession tools to transfer land and business assets from parents to sons during the next two to five years.
The sticking point is tenure. Chad returned home in 2008 after working as a forester in Missouri. During the eight years Ryan has been home, he and his father started EFFCO, with each owning 50%.
"For Chad to buy in would cost him about $800,000," Chet says. "That’s not really fair to ask, since Ryan didn’t buy in at that level."
However, it is important to recognize Ryan’s time on the farm and the fact that he signed bank loans and took on the risk, says Farm Journal succession planning expert Kevin Spafford.
Ryan wants an equal partnership, and he is willing to let Chad buy in at the level Chet deems fair. "I chose to stay home and I have benefited from using the equipment for my own operation," Ryan says.
- Legacy Project 2010 Report