11 THE BEST Advice for Lottery Winners
11 THE BEST Advice for Lottery Winners
Being able to manage your emotions before you do anything sudden is one of the biggest things.
If you’ve never had the comfort of financial security before, if you were really eking out a living from paycheck to paycheck, if you’ve never managed money before, it can be really confusing.
There’s this false belief that no matter what you do, you’re never going to worry about money again.
11 THE BEST Advice for Lottery Winners in Florida
For the lucky winner, here’s 8 Best Advice for Lottery Winners:
- Protect your ticket.Sign your winning ticket, make copies of it and stash the original in a safe-deposit box. If you are separated from the ticket, your signature should ensure you won’t be separated from the prize. The safe-deposit box will help ensure you’re not separated from it.
- Get help before you claim the prize. You’ll have three months (in most states) to come forward with your winning ticket. You likely won’t be able to keep your secret under your hat for that long, but before identifying yourself, assemble a team consisting of a financial planner, an accountant and a lawyer, with the lawyer being your first call. Lottery winners are often subject to legal claims out of left field, sometimes from co-workers who went in (or declined to) go in on a pool ticket.
- Stay anonymous, if possible.Another reason to hire a lawyer first is for help creating an entity, such as a revocable living trust or a family limited partnership that masks your personal identity.
Anonymity gets a lot of the initial fanfare out of your face.
In many states, however, winners are required to divulge their names for publicity purposes. If you have to identify yourself, change your phone to an unlisted number to avoid calls from scammers and “friends” who surface to make special pleas. You may consider moving to an undisclosed location, even temporarily, to avoid the crush of the press.
4.Take the lump sum. Winners must choose whether to receive 30 annual allotments or a single payment, a choice that’s often made based on the tax ramifications. But since taxes are likely to be going up, it’s better to have even a lesser amount taxed at lower rates—and your annual payments are going to take a tax hit anyway.
More pertinent is your age. The biggest payout to a single Powerball winner occurred in May, when an 84-year-old widow from Florida took her $370 million pretax payout at once.
It’s more of a personal question than a tax question. If you’re a wise investor, it makes sense to take it all at once.
5.Take a breath. Give yourself time to emotionally and mentally digest what the money means to you. The biggest financial threat lottery winners face is the temptation to reward themselves with cars, boats, and extra homes. Until the thrill of winning passes, stick the money in a low-risk interest-bearing account, where it will start to accrue immediate profit.
- Pay off your debts.Tales of lottery winners who are broke today are often about those who won $5 million or less, not $250 million.
You can’t give that much money away, the first $5.25 million you give your brother-in-law is free; the next $5 million will be subject to a 45 percent federal tax.
But let’s say you squandered your Powerball haul on bad investments. You don’t want to have blown $175 million and still owe anything on your car loan.
- Set a budget.Conservatively speaking, a $250 million lump-sum payout, placed in diversified mutual funds and bonds, should generate some $4 million a year after taxes.
Consider setting an amount in this range as your annual budget, leaving the principal as a backstop and the basis for wealth across generations. The pleasure of spending diminishes over time, after all. The pleasure of having it doesn’t.
8. Hire competent advisers
You may have experience managing your regular income, but when your net worth soars out of the park, it’s a whole new ballgame — and you’ll want a few strategic players on your team.
The best thing that someone can do if they win the lottery is to first identify an attorney, an accountant, and a reputable financial adviser. It’s best to have all of these advisers in the same room together, so that they can work together to structure the best strategies for claiming your prize and long-term management of your prize.
- Name your charity.Eventually, experts say, someone sitting on several hundreds of millions starts to think of their legacy—and ways to reduce the taxes now, and on their survivors when they go.
Charitable giving would likely become a big part of your life.
10.Pay the taxes on your winnings. In addition to all your long-lost uncles and cousins and BFFs from summer camp buddying up to you now that you’re loaded, you’ll have another set of eyes on your money: the IRS’. The folks running the lottery will deduct 25 percent and give it to the government before they give you what’s yours. Unfortunately, your good fortune will likely have bumped you up to the top income tax bracket — 37 percent for 2020. You are responsible for paying the difference. Satisfy this responsibility — before you can’t. Pay the lottery taxes as soon as you receive the wire transfer and move along.
11. Pack your bags and get out of Dodge. You’ve had a lot going on the past few weeks, what with winning the lottery, quitting your job, straightening up your finances, and dodging all the money grubbers, and now it’s time to relax. Pick the one place you’ve always wanted to go, turn off your phone, hop on a plane (first-class, of course), and chill. All the chaos you left will be there when you get back, but for now just enjoy the lemonade that life has handed you.
How does a lottery winner find a financial advisor she/he can trust?
One of the things you’ll notice, if you haven’t already, is how people will come out of the woodwork to “help” you with your money. Some position themselves as advisors, while others will be offering “business opportunities” or just looking for handouts.
You would be smart to seek out a trustworthy fee-only financial advisor to help make the most of your money and to deal with all those who want to part you from it. The phrase “That sounds interesting — let me run it past my financial planner” can short-circuit a lot of importuning.
The planner can help you determine a safe spending rate for your windfall and discuss some issues you may not have considered, such as the need for more liability insurance (since you’re now a bigger lawsuit target) and a plan to pay for long-term care.
Interview at least three and make sure they’re willing to sign a fiduciary oath to put your interests first.
Lottery Winners Financial Advisor in Florida
It’s not every day that you find yourself in such a position. While you may want to run out and buy everything your heart desires, this is not the best course. If you take the necessary steps to get your finances in order, you can beat the odds and avoid squandering your windfall.
After celebrating with family and friends, it’s time to get down to the business of your finances.
One of the best things you can do when you come into a large sum of money is to assemble a team of advisors. No one person can know everything so finding people who specialize in all of the different aspects of wealth management is important.
The first person you should consult is a qualified financial advisor.
This person can help you navigate all the challenges of your increased net worth.
Talk to a few financial advisors to find the person that’s the right fit for you and your individual situation.
When interviewing potential financial advisors, look for someone who’s objective and experienced.
You need to find a person you trust with your finances and won’t take advantage of you.
The person you select for the advisor role can help you determine the best way to receive the jackpot.
Most lottery winners have the option of receiving their money as a lump sum payout or in the form of an annuity.
Advice from a financial advisor and a tax professional will be key in helping you navigate the world of high-income individuals. They can help you decide if it makes sense to quit your job and how much you’ll have left after taxes for saving and spending.
Learning how to handle your windfall can turn into a full-time job. There’s a lot to learn about taxes and tax laws, managing your finances, as well as ways to protect yourself and your assets. Once you find a financial advisor that’s a good fit, that person can recommend other professionals that will help you get your finances in order.
11 THE BEST Advice for Lottery Winners
If you’ve won the lottery or come into a large sum of money, it’s up to you to decide how best invest your lottery winnings. Making the right financial decisions can help you ensure that you continue to enjoy the cash for many years down the road.
Don’t let your emotions cause you to make financial decisions you will regret down the road. Before you make any big moves, assemble a team of qualified professionals to help you make informed choices with your money. Focus on building a solid financial foundation that will support your long-term goals.
Mintco Financial Lottery Winner Fee Only Financial advisor
In Florida Mintco Financial Planning is the right choice for Lottery Winners Advice.
Our expert fiduciaries have years of experience in financial planning, and we work hard to act in good faith and in your best interests — not our own.
An important benefit of using Mintco Financial for Lottery winners advice is that we are a fee-only financial services firm.
This means if you are receiving a very large lump sum and are concerned about it, you can put those fears to rest by working with us.
It’s also important to note that we offer fee-only financial planning, so if you have in-depth, complex questions about the tax on lump sum distribution, you can feel free to talk with our experts until you are fully comfortable.
Finally, keep in mind that we are fiduciaries, not salespeople trying to unload financial products.
We are completely independent and have no need to sell you on a particular investment product. We seek out the solution that we believe is best for you.
CONTACT Mintco Financial PLANNING FOR Lottery Winners ADVICE IN Tampa, Orlando, Miami, Tallahassee, Pensacola AND BEYOND
Contact us Today at 813-964-7100
Email us at info@mintcofinancial.com