Whether you play the Mega Millions or the California Super Lotto, winning the lottery is the dream of many weekly players. Unfortunately, sudden wealth is something few people can handle well. Lavish spending for a few years can quickly lead to burning through millions, and winners often end up declaring bankruptcy. “ People need advisors and accounts set up before claiming their winnings," advises Bruce Ellner, a professional retirement planner with California Pensions, “the professionals will help the winner hold on to as much of their winnings as possible by making the money grow for them. Before any winner presents a ticket for validation, he or she should hire three people: an accountant, a financial advisor and an attorney.
- The Attorney. This is the first person to hire. An attorney can help you keep the ticket safe until you have your team in place to help you handle your winnings. An attorney may advise you to set up a trust and transfer “ownership" of the ticket to the trust, for which you are the sole trustee. You’ll still receive your winnings, but the trust can save you on taxes.
- The Financial Advisor. This person will help you set up accounts that keep your money growing in order to guarantee a safe income for you throughout your lifetime. A financial advisor will also investigate any financial investment requests that you will receive from family, friends or people you’ve never heard of, but who will assure you that you can make millions more with their method or product.
- Accountant. This person will handle all the tax matters and keep you out of trouble with the IRS. After the government takes their initial cut, there are still more taxes to pay.