Lottery fever is in the air. Friday’s Mega Millions jackpot set a world record of $640 million, and the winning ticket could be in your hand. Before you decide to buy Michael Jackson’s Neverland estate and dinners for a lifetime, make sure you have a strategy about how to protect your new financial assets.
With new millions in your hand, consider yourself lucky, and if you didn’t win this time, you can always try again. Although the chances of winning a jackpot such as Friday’s is one in 176 million, and experts say you are 50 times more likely to get struck by lightning than having the lucky ticket, the fact is that it could happen.
Just last month, Louise White, an 81-year-old grandmother from Rhode Island, won the PowerBall prize of $336.4 million, the third-biggest jackpot in the game’s history. With new money, White, and possibly you, could use the funds however you choose, but before you react to your earnings, be pro-active:
1) Get Out of the House
Winning the lottery can be overwhelming. To protect yourself and your earnings, get out of the house, suggests financial expert Carmen Wong Ulrich on MSNBC. Ulrich says everyone can find out where you live instantly, including people from second grade who may show up at your door. Go to a safe place such as a suite at a plaza.
2) Create a Personal Network
You won’t necessarily need a bodyguard, but it is a good idea to surround yourself with three to five people you’ve trusted the most in your life. They can filter calls, e-mails and requests you can be certain you’ll receive.
3) Don’t Touch the Money…Yet
After winning the lottery, you can’t walk up to a teller with a check for hundreds of millions of dollars. More than likely the bank will have at least 10 lawyers on their side. Therefore, it’s imperative to equip yourself with a team. You will need a financial planner, an estate attorney and a tax specialist. People often want to gift money after they hit the lotto and a tax specialist can save you money in the long run.
Once the money is available, make sure you don’t go crazy. In other words, don’t make the same mistakes as some previous winners.
It’s understandable if you want to share money with family and friends, but be careful. In 1996, Jeffrey Dampier and his wife won $20 million in the Illinois lottery. They used the money to buy their extended family houses and founded a gourmet popcorn company, but when going to visit a sister-in-law who claimed she was having car problems, the sister and her boyfriend pulled out a gun, kidnaped Dampier, then killed him.
Although it may be difficult, beware of the people with whom you surround yourself.
Also, don’t spend all your money at once. When Evelyn Adams won the New Jersey lottery in 1985 and 1986, for a total winning of $5.4 million, she blew all of her money gambling in Atlantic City. Today she no longer has any of the earnings and lives in a trailer park.
Winning the lottery can be life changing, but while the reality of holding tens of millions of dollars hasn’t hit you yet, make choices to ensure your treasure is protected.
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