PRO-DAIRY: Information you need for transfers

Editor’s note: The PRO-DAIRY section of the November 2009 edition of Eastern DairyBusiness deals with Farm Transfers. To read the four-part section, visit:

• Transferring a dairy…Getting started

• Information you need for farm transfers

• Take the financial pulse of your business

• Success isn’t guaranteed, but it is possible

Before you begin the farm transfer process, gather all the personal and financial data necessary to make thoughtful decisions about your business’ future

By Lee Telega

One of the first tasks in developing a farm transfer plan is compiling the necessary information your family and advisers will need for productive discussions and sound decision-making. This information falls into four categories: property, financials, business management and important documents.

You can pull the information together electronically for easy updating. But paper files will work.

Property File

List all real and personal property owned, identifying whose name each item is under, whether joint or individually owned. Include the current market value of each item and its depreciation schedule. If available, include the latest written appraisals.

Financials File

Start with a current balance sheet. Add other financial information including income-expense statements for the past five years; a list of debts owed by whom, including credit card debt; and gifts made by the older generation – the amounts, when given and to whom. Also prepare an accounting of the older generation’s expected retirement program benefits and a list of anticipated major expenses for the next 10 to15 years.

Business Management File

Because this file contains more personal information about the business and people involved, it might be more difficult to bring together. Include the farm business mission statement and major long-term (5- to 10-year) business goals. Also put in writing a summary of the present estate situation and the objectives of the farm transfer plan.

Now for the tough part. The family needs to include vital statistics of all members of the family and a self-assessment of the talents each person brings to the business. Finally, each family member should write a brief paragraph expressing his or her concerns about the transfer process and the expected outcomes. (See sidebar.)

Documents File

Include wills, deeds, income tax records, mortgages, promissory notes, insurance binders and information about nonfarm investments, retirement income and trust accounts.

Make a list of current farm business advisers, both financial and production advisers, and their contact information. These advisers might include your loan officer, farm accountant, Extension agent, pastor, trusted family friends, attorney and farm business consultant.

Engaging advisers from start to finish provides a family with expertise and outside points of view that are so necessary to success. They help analyze options and ensure the difficult decisions truly reflect the common interests of family members.

Put thoughts on paper

Have all family members answer these questions about themselves and what they believe of the other family members. The answers will help identify the personal factors that will guide discussions and impact decisions:

What talents and abilities do you (and others) bring to this business arrangement?

What financial assets do you (and others) bring to this business arrangement?

What are liabilities you (and others) bring to this business arrangement?

What do you (what do you believe others) want from this farm transfer process?


Lee Telega is a PRO-DAIRY educator who specializes in a range of areas including farm business and environmental management and policy. Reach him at 518.496.8686. Email: