The Dell family takes steps to secure its future.
Greg Dell jokingly calls himself a late bloomer. At an age when most farmers might be contemplating retirement, the Westminster, Md., farmer and his wife, Della, find themselves in the primary ownership position for the family farm.
Ironically, at the same time they are grasping the reins, they are looking for ways to bring their children into management roles.
When Farm Journal readers first met the Dell family, it was four generations deep and struggling for direction. Working with Farm Journal succession planning expert Kevin Spafford has allowed them to sort through the maze and begin to find financial and management solutions to help the family and the farm survive. Little did they know that the future wouldn’t include a key member of the third generation, Tommy Dell, who died in a farm accident.
The tragedy shifted plans, but two years into the journey the transition process has included:
- financial analysis for first-generation founders Donald and Leona to ensure their financial security.
- a plan to allow Roger, second-generation partner and Greg’s brother, to retire through a 20-year purchase agreement that redeems his stock in the farm corporation.
- gifting of preferred stock from Donald and Leona to Greg.
- transition of the bookkeeping responsibilities from Leona to granddaughter-in-law Shannon.
- sale of dairy cows in the farm partnership to reduce debt.
- a business plan that allows Greg and Della’s son Gary and his wife, Crystal, to purchase the cows and rent dairy facilities.
- review of the current C corporation ownership structure.
- review of current estate planning documents to ensure they meet the family’s objectives.
- analysis to minimize taxes on each estate and ensure that funds are available to pay any tax due.
- meetings with attorney and tax accountants to keep advisers current and working together.
The next steps. "Greg now holds the obligation and opportunity of ownership," Spafford says. "From here, we start to anticipate what the farm might look like in the future."
First, Spafford wants to review Greg and Della’s personal expenses and look at their hopes and dreams. Della, who works for the state of Maryland, has another six years before she can receive full benefits upon retirement. Greg, on the other hand, can’t fathom retirement.
The question of roles and responsibilities is more immediate than ownership transfer. "We need to enlist the people who want to be involved and keep them moving forward," Spafford says.
Gary has found that he enjoys the crop side and working at the family’s grain elevator. His brother Douglas, a full-time firefighter, enjoys working on the farm part-time.
Gary is considering new enterprises that might use the family’s commercial grain-handling facilities. An existing seed sales business might be expanded as well.
"This family has lots of talent, experience and resources. Our next challenge is to figure out how we pull it all together," Spafford says.
A business plan that outlines duties and payment is the answer. Operating agreements, employment policies and an employee handbook are in the works.
"We need to protect the farm, preserve it and grow it. If we do that, we can build a compensation plan that is fair," Spafford says.
Greg says the consulting help has remodeled the family business. "But I’m not so sure we won’t need you guys even more as we sort out how to bring in the next generation," he says.
A Tribute to Tommy
Tommy Dell, a third generation family farmer, died Sept. 29, 2010, on his Westminster, Md., farm.
Tommy had a full-throttle personality. You can find his name linked to everything from activities as a wrestling coach to comments submitted regarding the Department of Justice hearings.
He was a farmer seed salesman, a Colts fan and a duck hunter. He raised Angus cattle and goats. His dog, Sadie, was his constant sidekick.
He believed in bear hugs for his kids, Josie and Grady, family and friends. He would drop everything to be at the end of the lane to meet the school bus.
Working with family by day wasn’t enough. When the young Dell cousins piled into the farm pond along with their 4-H show pigs, Uncle Tommy was amid the melee.
Shannon Dell’s heartfelt eulogy to her husband reminded
family and friends that he lived each minute of his 36 years with extraordinary vitality. "We danced every day," she said.
His life is a testimony to embracing everything around us.
The Dell Family
Four generations of the Dell family, including six families and 21 family members, depend on a farm located in the hills of Carroll County, Md., outside of Westminster. Since being introduced to Farm Journal readers, the Dells are well on their way to unraveling the transition puzzle one step at a time. Several family members have met their retirement goals. The dairy is now owned and operated by a husband-and-wife team in the third generation. An employment policy is in place if the fourth generation wishes to join the farm.
With professional guidance, the family is working together to deal with the challenge of losing Tommy Dell, one of the main figures in the farm’s future. Central to this effort is concentrating on securing the farm’s finances so it is there for generations to come.
Read more about the Dell family.