How to Avoid Making Mistakes When You Hit the Lottery
The idea of going from rags to riches might sound like an ideal dream. However, you might be surprised. In a short time, you could find that big wealth comes with its share of nightmares. Even the biggest lottery winners have found themselves far less prosperous than they started. Consequently, it’s crucial to know what mistakes to avoid when you hit the lottery.
Blowing lottery prizes is of international significance. One news publication runs an annual feature article on big winners who have essentially become losers of a sort. Take for example one ten-million, Canadian lottery prize winner. She’s back to living paycheck to paycheck. Meanwhile, she also needs to use public transportation to get to work. After all, she does have to come up with the monthly rent.
Decades ago, a Pennsylvania man won nearly $17 million in a lottery prize. Within a year, he was already $1 million in debt. Worse yet, the winner’s brother tried to hire a hitman to murder him. The greedy sibling figured he’d make out better as far as an inheritance.
Sad stories about past lottery winners hit close to home as well. A Texas preacher who doubled as a stock boy hit a $31 million jackpot. Although he used some money for lavish purchases and travel, the big winner also gave to the poor. He had a hard time saying no to requests for cash. Ultimately, his life turned upside down. The generous man divorced and took his own life.
The bottom line is that even with lots of cash, it’s entirely possible to lose it all. Smart winners seek out the right professionals to protect their interests. For starters, that includes legal advisors who understand lottery law. Next, it means setting up consultations with accountants and financial advisors.
Legal Advice and the Lottery
Are you a big lottery winner? No doubt you’d like to make no mistakes when it comes to your prize. More than likely you can figure out why you need an accountant and a financial adviser. However, you might not fully understand where a lawyer fits into the picture.
The reality is that you should retain legal counsel before you claim any winnings. First, it may be that you are part of a large group that has agreed to share in the proceeds. Next, it might be an issue of anonymity. Truth be told, many lottery winners know nothing about the fact that winning big gives the Texas Lottery publicity rights. You could find your name and address blasted all over the place.
How could any of this be a mistake? For a second, imagine that you bought lottery tickets as part of a pool with your lunch crowd. You decide as a group to send one representative to collect the prize and give her authorization to give everyone a portion. Among the reasons that’s a bad idea are tax consequences. An attorney can create a legal entity that includes all of the group members. In fact, there’s also the possibility of protecting your identity by similar means.
There are some easy tips when it comes to winning the lottery. A lawyer can assist you with even something as simple as holding on to your ticket for safekeeping. Your new found wealth will bring on a host of other legal issues as well. Here are some different reasons you might need an attorney:
- Formation of a trust or legal entity
- Legal advice concerning investments into existing businesses
- Establishment of new business ventures
- Preparation of estate planning documents
- Setting up charity foundations
- Acquisition of real property
Once again, you should consider retaining legal counsel once you are aware that you are about to come into some big money. Moreover, an attorney can give you experienced advice after the cash is already in your hands.
Are You a Big Prize Winner?
Manfred Sternberg and Associates has helped a number of groups and individuals who became instant millionaires. Keep luck on your side by retaining experienced legal counsel. Give us a call to see how we can assist you once you’ve hit it big!