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You've won the lottery! Now what?
You’ve done it. You’ve beaten the odds and won more than $1.5 billion! Here’s what to do next.
The odds of winning the more than $1.5 billion Powerball jackpot are currently approximately 1 in 175 million — 60 times less likely than being struck by lightning, according to State Farm.
Billionaire entrepreneur and owner of the National Basketball Association’s Dallas Mavericks, Mark Cuban, also was handing out some advice this week for potential jackpot winners.
State Farm weighed in this week on what a potential winner of the jackpot should do following his or her freak-out.
The insurance company talked to several financial experts and former winners for the following advice.
Before turning in the ticket
The process should begin with securing the ticket and making several copies for a new lawyer and accountant. The actual ticket is suggested to find a home in secure safe. The new team of advisors should look over rules and contracts prior to the winner signing anything. The experts suggest finding a new accountant, lawyer and financial advisor who have experience with large sums of money unexpectedly finding their way into bank accounts.
The experts also say to take time; the money isn’t going anywhere and it’s important to have a solid plan in place. The plan should include a variety of goals for personal, family, lifestyle, financial and charity goals to help guide a fruitful future.
A will should also be an immediate action, so if something happens to the winner, the family is OK.
The plan also will include whether to pick a lump sum — about 60 percent of the total volume — or paid out over time. Experts say long-term investments could help the lump sum grow larger than the annual payments, but the annuities might be the more responsible option.
Protecting privacy is also an important aspect. Some lotteries will require some public appearances, and in that case a new phone number and P.O. Box are suggested.
Money in hand
Once the check for millions is in the winner’s hand, experts suggest talking to a bank’s upper management or private banking department ahead of time for the best options for large sums of money. Also because bank accounts are only insured for up to $250,000, the experts suggest spreading the money to various accounts and investments.
Winners also need to budget. While it might seem like a lot of money, people can blow through it quick — especially once taxes are figured in. Experts suggest setting strict monthly and annual budgets and making sure to sock away money for education and retirement expenses.
The experts also suggest coming up with a charity and giving plan for friends, family and charities, and looking at the tax situation for how much money can be given at various levels. The experts also suggest the possible formation of a foundation.
After some time
Throughout the whole ordeal, the experts suggest staying true to one’s self and not to do anything drastic like quitting a day job. Winners could also start a new career they’ve been thinking about trying or going back to school.
Keeping a healthy lifestyle is also important as money can bring a lot of stress from loans and requests for help, according to the experts. Professional counseling could be sought if the money causes too much stress.
For more, check out the online State Farm Learning Center.