Chet Esther farms in Beardstown, Ill., with his wife Lori and two sons Ryan and Chad. The Esther Family is in the process of transferring the family farm to the next generation and was chosen to participate in the Farm Journal Legacy Project.
Meet the Esther Family
Sep 13, 2010
I have been encouraged to write about our progress with the Legacy program, as you will soon see I’m not a writer but I would like everyone to get some sense of what we are doing and why so here goes.
Our family – my wife Lori, son Ryan and wife Erin, and son Chad and wife Tanya, attended another meeting with the Legacy Project team, which included Kevin Spafford, Josh Sylvester and Richard Dee today. This meeting was held on site at our cabin on a farm near Rushville, Illinois.
We had a lot to cover. The first order of business was a quick review of what we have done so far since it has been several months since our last face to face meeting. Kevin wanted to know about our progress on the Buy/ Sell agreement, which is an agreement that spells out how, when and why an entity would be bought or sold by one of the owners.
We used EFFCO, which Ryan and I own 50/50, as an example, but we also need one for Ryan and Chad with their new venture Esther Farms. We started in the spring by getting a checklist from the Farm Journal Legacy Project web site, which we took to our attorney to get his ideas. He looked it over and gave us some homework (many decisions that he couldn’t make for us, such as how to value the entity and how to determine permanent disability).
To help with those questions we then went to our accountant, Walter Lynn who has helped craft many Buy/ Sell agreements to get his insight and opinion on valuation and disability. So after some real soul searching, another meeting with our attorney and Walter’s help, we are ready to write the first draft which has a lot more to it that I ever dreamed.
I told Kevin that it’s easy for me to sell 20,000 bushel of corn or decide to spend $100,000 trading combines but when I start thinking about the 5 D’s (Death, Divorce, Disability, Dissolution and Debt) I lose confidence in my decisions quickly. I’ve never spent much time or energy thinking about how we would value the business in the event one of us got killed, disabled or just had had all the fun we could stand, but after going through this exercise I realize it’s better to talk about it now that trying to (God forbid) figure out how to compensate a grieving spouse so she can move on with her life after the fact. With this document which Ryan and I along with our wives will sign it will all be spelled out.
Our next two projects are a detailed business plan and an operating agreement for each entity which also have deadlines further down the road.
The rest of our morning was spent with each family unit working through financial goal which for Lori and I means a discussion about the R word, retirement, our needs, goals and any special wishes like a 529 for the grand kids college education.
Every time we attend one of these meeting it shows me how unprepared I am for the future and I can’t tell you how important I believe a process something like this is for every family who wants the farm to continue and has something to pass on to the next and future generations.