Share

Winning a large jackpot. Now what?

Avatar

Now with the fever of the $450 million lottery in full pitch.

Questions:

They say it is smart to hire a lawyer, accountant, and/or financial advisor.   Probably to save your money from gold diggers or lawsuits from the vultures called friends and family.     How do we pick the right individual or corporation?   Does a large lotteyr winner need all three professionals.

 

What is a reasonable amount of fees/salary that a lottery winner should expect to invest in those professionals(lawyer, accountant, and.or financial advisor)

Should a lottery winner pay them by the hour, by commission, or by flat fee-retainer?

Obviously most folks have never had to hire a lawyer, accountant, or finance firm.  So deciding who to choose and how much is a dilemma

Avatar
In response to slickster505

Of the three, an attorney is the most important. Most states give the winners plenty of time to decide on cash or payments so you can talk to an accountant and/or financial adviser after validating the ticket unless you need directions to lottery headquarters from them.

Players know if they have any obligations (child support, judgements, tax liens, etc.) that could affect getting them check or a possible court ordered injunction. Seeing a lawyer before validating the ticket is obviously more important to them. The best advice I heard is sign the back of the ticket before telling anybody.

ttech10's avatar - blobdude

An attorney is the first person I would hire. They would setup a trust or LLC and collect the winnings for me, keeping my name private.

If you go for an advisor, most would suggest fee-only advisors (http://www.napfa.org/) and ones that hold a CFP certificate (http://www.cfp.net/). Fee only removes a lot of conflicts of interests. That doesn't mean fee based (commission) is bad, but your advisor may be tempted to have you invest in something purely to make himself more money. Here's an article from Yahoo that puts more detail into the differences of fee only and fee based.

A CPA is an important one. You can find CPAs that are also CFP practitioners (the CFP site will list what areas the people listed specialize in, accounting being one of them), but I don't think that's required.

You should look at numerous qualified people and choose whichever fits you best and who you feel most comfortable with. Remember that you're likely to have these people in your life for a long time.

Avatar
In response to ttech10

Out here in CA, the Lottery encourages one to "form" a trust but is quick to point out that this would not shield one from public disclosure, meaning that if people dig deep enough, they will come up the name of the winner, perhaps Texas rules are different. 

ttech10's avatar - blobdude
In response to noise-gate

That's how it works here as well. Names are subject to open records. For me that's enough, as long as it isn't just out there on every major news publication.

Also, on the topic of trusts, at least in Texas you can sign the ticket in your name, and then show up at the lottery offices with the trustee and sign a form that would transfer ownership to them. That way, you don't have to worry about having an unsigned ticket, and someone else can still collect the ticket and be mentioned in the press release.

Avatar
In response to noise-gate

Claiming with a trust is the only way to remain anonymous in Texas, but that doesn't exempt anyone from back child support, court orders, tax liens, etc. The store selling the ticket either knows or has good idea who bought the winning ticket and trust can't prevent them leaking information.

Asking an anonymous jackpot winner who claimed using a trust for advice is out of the question. LOL

CDanaT's avatar - Nolz june15.jpg

This will be the Attorney I hire over in Dallas, should I become a PB winner
http://www.prweb.com/releases/2011/7/prweb8654988.htm
 

Let the professionals do their job, pay a bit more and reduce your stress/worries and concerns.

Avatar

I loved my taxation professor and he is an amazing lawyer who worked as a CPA in a big four for many years so he would be my go to lawyer , since we talked many times in class about tax planning. I feel like since he has worked as a prosecutor , cpa and has his own law firm for many years he would have a lot resources to help me navigate ot.

As for accountant and financial planners ,if you go to an establish private wealth management group( think jp morgan , GS etc) they usually have a full team that can help you navigate all of the areas.

If you go with an individual you should always check with the professional board too see the standing  , with that kind of money I would even hire a private investigator to check them out.

As for flat fee or by the hour that depends on the service you need at the moment, it also depends on the type of investor you are going to be. If you know a lot about finances and will do most of the work yourself than you need less services. But even in private wealth management groups they offer you different levels of services .

IPlayWeekly's avatar - avatarmoney

I would wake wife up, I check PB around 11pm (night of the drawing) then call the accountant the next day. Once that's done then book a trip somewhere, no more 9 to 5.  I can truly enjoy life.

Raven62's avatar - binary
In response to slickster505
maximumfun's avatar - Lottery-030.jpg
In response to Raven62

Imagine being Joe Somebody ... turning into Sir Joe the Magnificent ...  and becoming Joe the Village Idiot in a very short time. 

Poor Joe.  :)  Thanks for the post!

Avatar

For financial adviser, you have to be very careful since most of the financial industry is mostly a sales industry instead of actual investing that's looking out for your interests.  You need to look at who are certified to be "fiduciary" advisers. 

I would take sometime to read up on Jack Bogle and Vanguard and the "Boglehead" philosophy of investing. It's what I do and it's the cheapest/easiest way to invest for the long-haul. 

 

If you win 450mil jackpot, the biggest thing is to protect your wealth. Do not fall for exotic/high return/low risk/etc. investments. Stick with what's tried and true. Maybe 40% stocks in a low cost passive index fund and 60% in US treasury bonds. Simple as that. You'll get steady gains that'll keep up with inflation.

 

edit: actually the very first thing you should do is sign your ticket and run to your bank and put that ticket away in a safety deposit box ASAP!

TopEnd of thread (1 page)

Welcome Guest

Your last visit: Sun, Sep 19, 2021, 3:02 pm

Log In

Log InCancel

Forgot your username?

Forgot your password?