You Won! What Not to do After Winning the Lottery
by Tom Kirk
Three winning tickets were sold to the largest lottery of all time, the almost 1.6 billion dollar Powerball jackpot. One of those lucky winners bought their ticket right here in Melbourne Beach, FL. The prize will be split evenly among the winners with each potentially getting over 500 million dollars!
This is certainly one of the best financial things that can happen to anyone, but with that much money comes some significant challenges too, not the least of which include taxes (income and estate tax), scammers and loss of privacy. While many resources explain what to do if you win, it is surprising how few actual warnings are out there as a guide to help lottery winners do the right thing.
I found a cautionary list published by USA Today on January 1, 2016. According to Twelve Things Not to Do if You Win the Lottery
- Forget to sign the lottery ticket, or forget to report it to the state
- Tell everyone you know
- Automatically decide to take the up-front cash instead of the annuity
- Think that you are the smartest person to manage your money and finances
- Let your debts remain in place
- Become the excessive high-roller, living the Big Life
- Buy everything for everyone, or even for yourself
- Say to hell with a budget
- Become the business backer for all your friends and family
- Give away the whole enchilada
- Get celebrity and athlete envy
- Think that laws and decency standards no longer apply
We here at our wealth services firm in Melbourne know that close to 70% of all lottery winners go broke within a few years, so it appears that many of them violate some or all of the suggestions above. And while the winners of the recent Powerball jackpot may think it is impossible to ever lose THAT MUCH MONEY, I am sure that’s what Nicolas Cage, Wesley Snipes, M.C. Hammer, Evander Holyfield and many other once rich people felt before they ended up broke or close to broke.
Our wealth services firm in Melbourne would be happy to provide you more information on how to manage your money and finances. Congratulations to the winners! Just be careful out there.