Slides for Annie's Project-New Jersey Conference

1. Personal Finance
in Succession
Planning
Dr. Barbara O’Neill, CFP®
boneill@njaes.rutgers.edu

3. Don’t Do Succession
Planning Like This Family!

4. 10 Tips in 20 Minutes

5. 1. Hold Family Conversations
• Discuss hopes and fears openly
• Discuss various succession planning options
– Farm buyout valuation
– Gifting of farm stock shares
– Plans to “let go” by Generation #1
– Estate planning fairness among siblings
– Ability of farm to support multiple families

6. 2. Contact Financial and
Legal Advisors
• Discuss family wishes
• Discuss estate planning strategies
• Prepare/revise basic legal documents
• Prepare farm-relevant legal documents

7. 3. Establish Personal
Retirement Savings Accounts
Personal retirement savings accounts:
• Roth and/or Traditional IRA and spousal IRA
• $6,000 annual limit under age 50 and $7,000 age 50+
• Taxable accounts (e.g., a low-expense index mutual fund)
• Low-cost annuities with a highly rated insurance company
• Employer plans from off-farm jobs

8. 4. Set SMART Goals
for the Future

9. 5. Annually Update Financial
Statements
• Cash Flow: Income minus expenses
• Net Worth: Assets minus debts

10. 6. Diversify Your Investments
• Set target asset allocation weights
– Example: 45% stock, 25% bonds, 20% real estate, 10%
cash equivalent assets
• Rebalance portfolio back to target weights
• Key factors:
– Age
– Investment risk tolerance
– Investing knowledge and experience

11. 7. “Bucket” Your
Retirement Savings

12. 8. Purchase Adequate
Insurance
• Property (auto and homeowners/renters)
• Business property
• Umbrella liability
• Life
• Disability
• Health
• Have a long-term care plan

13. 9. Check Out RCE Resources
https://njaes.rutgers.edu/money/
• Spending Plan Worksheet
• Net Worth Calculation Worksheet
• Beneficiary and Personal Representative Designations
• Digital Assets Inventory Worksheet
• Financial Goal-Setting Worksheet

14. 10. Review the RCE Later
Life Farming Course
https://laterlifefarming.rutgers.edu/

15. Questions or Comments?
Best wishes for successful
succession planning!