Today’s guest blogger, Austin Weaver, has advice on what to do when you get your pot of gold.
Any lottery jackpot comes with a life-changing amount of money, whether it was from the recent $565 million Mega Millions jackpot or from a jackpot which was only tens of millions of dollars. That money from a winning lottery ticket can materialize into college funds, cars, and vacation getaways.
However, with newly acquired millions come additional financial responsibilities, advisors, investments, and celebratory spending to track. Most lotteries allow winners between 6 months and a year to collect their winnings, so before running to cash in that winning lottery ticket, read this short checklist.
Assemble an all-star financial team
Estate planning is the most important thing any lottery winner can do to protect themselves and their money. Make sure to set up a will and a living trust before even thinking about cashing in a winning lottery ticket. Without these, if a winner dies, most of their millions will be redirected to the government for income tax, estate tax and probate costs.
Any jackpot winner needs to find a top-of-the-line lawyer, CPA, financial advisers and insurance agents that have experience working with large sums of money. Make sure they can be neutral and unbiased with their guidance.
Take a family vacation
No, this does not mean Disney World. Go somewhere peaceful and quiet; spend quality time as a family unit. Suddenly acquiring large sums of money, like a $656 million Mega Millions jackpot, can be overwhelming and confusing for everyone involved.
Any lottery winner has the financial cushion to take some time off work and they should spend it with their loved ones. Have open conversations about maintaining family values, priorities, and humility. Encourage communication and establish an understanding that money should not change people’s values or attitudes.
Make a list of charities to support. Stick to the list.
With millions in the bank, it is only natural for any lottery winner to donate some of their windfall to their favorite charities. However, winners will most likely be inundated with donation requests from countless organizations and projects, making philanthropy incredibly overwhelming and nearly impossible.
Winners should first and foremost compile a list of organizations or causes to which they feel personally connected – a local shelter, environmental group, religious organization or research group. It is impossible to donate to every single charity in the world and winners find they make more of an impact by focusing on a few organizations.
It is also much easier to maintain order over donations and track how the gifts are used when they are concentrated in a few places. Make a list and stick to it.
Diversify the investing portfolio
Any lottery winner should strive to make sound investments that would let them live off their jackpot’s interest instead of the principle. However, smart investing is a balancing act and it is crucial that funds are spread out and invested in a variety of places. Purchase stocks and bonds and establish trusts for children and grandchildren. Winners may also choose to invest some of their millions in new business ventures, fine art, antique cars, or real estate.
So when you check your EuroMillions results (or any other lottery) and find out you have a winning ticket, get excited. But also – no matter what – recognize a risky investment and spread the wealth around to protect yourself and make sure to stay organized!
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