What to do if you win

So you’ve beaten the infinitesimal Mega Millions odds and are now staring down a life-changing cash flow – but what you do next with the jackpot money will decide how rich you ultimately stay.

Tuesday, the jackpot surpassed $ 1 billion. While many dream about spending cash, the actual winners may be overwhelmed by a different feeling – anxiety.

“The biggest fear that pretty much all recipients of sudden wealth have, and especially lottery winners, is that they are going to screw it up,” Robert Pagliarini, author of “The Sudden Wealth Solution,” told Nexstar.

Pagliarini has been advising clients, including lottery winners, for more than 20 years on how to manage large cash flows. He said that the goal is always to turn that lump sum into eternal wealth, but added that there are some must-dos for lottery winners.

Keep the ticket

Holding a winning ticket and knowing that one slip of paper could easily be lost or stolen can be a terrifying feeling.

Until signed, a lottery ticket is a bearer instrument, meaning that anyone who owns the ticket can claim the money.

“That means they really have to document that they’re the ticket holder,” Pagliarini said. “So I’ll take a selfie with the ticket, I’ll take a video of myself with the ticket, I’ll sign the ticket and I’ll keep the ticket in a very safe place.”

For years, there have been horror stories when it comes to this exciting time after winning the lottery – there are Women in California who said he lost a $ 26 million ticket in the laundry. A man in Myrtle Beach, South Carolina thought he lost his winning ticket always – only have his wife find it.

Build your team

For lottery winners, it can be their own friends and family – or complete strangers – who try to siphon away their money.

“They will want to try to separate you from your new lottery winnings, and that often happens,” said Pagliarini. “And so you need a team to insulate you and protect you from that.”

He recommends hiring a lawyer, tax advisor and financial advisor, as well as keeping lottery wins a secret for as long as possible. If you live in a situation where you have to reveal the victory, it adds some challenges “because now the whole world, especially the size of this jackpot, everything will be talked about.”

There will be helicopters flying overhead as you go and collect victories like this. This happened because the world was excited. And now everyone knows that you have a billion dollars which is not good. In any case that is a good thing.

Robert Pagliarini, founder, Pacific Wealth Advisors

Pagliarini recommends building a media plan, sharing the news with only one trusted family member at first and staying out of the public eye if possible.

Big decision

A monumental decision that millions of Mega jackpot winners face is how to receive their winnings – in a large lump sum or spread out over the years in annuity payments.

If someone beats the odds of 1-in-302,575,350 and wins today’s Mega Millions jackpot on Friday, they will ultimately have to choose between taking the pot in 30 payouts over 29 years, or taking a lump sum of roughly $602 million.

The final decision is a personal one, and what works for one may be a disaster for another.

“My teacher is that 99-plus percent of people choose a lump sum because they want money, but the problem is that now they have this money, if they screw up, if they make bad decisions. if they get the wrong people on their team, they spend too much and there’s no do-over button,” Pagliarini said. “With an annuity, you know, you can mess up year after year, and that’s okay because next year you’ll get a new paycheck. So maybe for the first seven or eight years, you just blow it. But by year eight or nine, you’ve got things figured out. That means you have another 20 years of pay coming in to redeem yourself.

“You have to see what the best option is for you,” says Steven Evensen, CFP, a financial advisor with Gerber Kawasaki Wealth and Investment Management.

While lump sums are more popular and will give immediate access to money, it also means more taxes.

“You will be taxed up to 37% federally, then even more depending on your state tax,” Evensen cautioned. “So I will speak to an accountant about it to make sure you are not kind of overspending in your head before you actually receive the money and receive your tax bill at the end of the day.”

Regardless of the payout plan you choose, Evensen recommends investing some money. What you invest in depends on your goals, but “low-cost mutual funds, index funds are a good place to start.”

Leave a Reply

Your email address will not be published. Required fields are marked *