Ashby Lumber - A Plan to Protect the Family Business for Generations

“I grew up in Ashby Lumber,” Emily Morgan said. “From as young as I can remember, I spent spring breaks sweeping the floors. My cousins and I would fill jars with jellybeans to hand out to customers at Christmas.” These childhood memories fuel Emily’s passion for Ashby Lumber today, though her current role as third-generation owner and CEO is a far cry from helping with small tasks while her mother and uncle led the family business. “There’s pride in taking over something that my mom and uncle put so much of their lives into,” she said. “Our team is strong. So many great employees depend on our family. It’s a big responsibility.”

A Transition to the Next Generation

Emily’s cousin Tom Hogan spent his childhood summers at the business. He joined full time in 2011 and eventually became vice president of finance. When their respective parents announced their retirements, the duo was determined to transition Ashby Lumber to the next generation. “The number of independent lumberyards has dwindled over the years,” Tom said. “You hear horror stories about an owner unexpectedly passing away without the right plan in place. It harms not only the family, but the business and its employees.”

“There is a lot of consolidation happening in our industry,” Emily added. “It’s important to continue the legacy of remaining independent businesses. Once we decided to keep it in the family, the focus turned to how do we do this successfully.”

Guidance on Succession Planning

Attorney Dustin Davis understood the stakes involved for Ashby Lumber. He is a member of Federated’s network of independent business succession and estate planning attorneys. “Usually, the third generation is where most companies have problems,” he said. “I’ve seen thriving businesses go to nothing in six months because of a lack of planning, just because the probate process is delayed or the wrong people are put in charge.”

Tyler Nohr, Emily and Tom’s Federated Insurance^® marketing representative, introduced the two to Dustin. She recognized their need for legal expertise in the business succession and estate planning process. “It was time for them to take ownership,” Tyler said. “Putting them in touch with Dustin happened naturally after many conversations during annual Financial Protection Review^SM meetings. We promise to bring the best to our clients and associations, so we have to bring them the best attorneys.”

Putting the Plan in Place

The planning process required Emily, Tom, and their siblings outside of Ashby Lumber to have honest conversations to help all parties feel treated fairly. “We did it as a team and a family. In the long run, it made us closer,” Emily said. “Our priority was to see the business succeed, which would ensure the entire family succeeds.”

Dustin and the family built a plan to account for all contingencies. Emily and Tom received controlling ownership of the business. A buy-sell agreement, funded with life insurance, outlined the transfer of ownership in the event of death, disability, or retirement. They updated corporate documents to integrate planning and address tax implications. Finally, Dustin helped family members address their personal estate planning needs. “A personal plan is just as important as a business plan,” Dustin noted. “If a great business plan conflicts with someone’s personal plan, you’re going to court nine times out of 10.”

Looking Ahead

“Completing the planning process came with a lot of relief and clarity,” Tom said. “It gives employees a sense of stability and ensures everyone is taken care of so livelihoods and family relationships aren’t affected.” Emily noted that each person involved in planning brought their own specialty knowledge. “I know about running a lumberyard, but I don’t know about insurance or estate planning,” she added. “It’s important to partner with people who are the best at what they do, and Federated^® has been there for us.”

With a solid plan in place, Emily and Tom turned their attention to growing their business, serving customers, and making Ashby Lumber the best it can be. When looking to the future, Emily pointed out that all of their kids are still young. “But we certainly hope to make it to a fourth generation, and we have a plan that makes sure there’s a place for them if they choose.”