Winning the lottery is unlikely. Millions of people play, and not every drawing results in someone actually winning. The biggest prizes announced are often the product of multiple failed drawings, meaning that no ticket holders have previously won.
Of course, when someone does win, they expect their life to change completely. Many people expect a positive impact, but winning the lottery can often cause a variety of serious challenges. Some winners squander their money, ending up destitute within years.
As discussed in a recent San Francisco Chronicle article about the impact of lottery winnings on winners that cited firm partner Benjamin A. Goldburd, there are certain important steps to take to protect the windfall from a winning lottery ticket. In the unlikely event that an individual does win the lottery, the three tips below can be very important to maximize the positive impact of their good fortune.
1. Keep things as quiet as possible
Some states allow lottery winners to claim their funds anonymously or through an LLC. California is not one of those states. Lottery winners do not necessarily have to participate in publicity photos and television interviews, but their names do become public when they formally accept their winnings.
Limiting how many people know before the matter becomes public can be helpful. Keeping things quiet gives the winner a chance to plan.
2. Secure professional support
Many people who play the lottery fantasize about shopping sprees and vacations. However, what they truly need is financial guidance to optimize the impact of their windfall.
They need to identify their personal goals and calculate the amount that they may receive, which varies depending on whether they accept a lump sum payment or regular payments for the rest of their lives. Winners may need help developing and implementing strategies to protect those assets for decades and even beyond their death.
3. Prepare for a flood of requests
Close loved ones may expect to receive some of the lottery winnings by virtue of their relationship with the winner. Even distant family members and acquaintances may approach people who receive large amounts of money and start begging for assistance.
They may fabricate personal tragedies or exaggerate their circumstances. Total strangers may engage in similar behaviors. Lottery winners often find that their personal information ends up in the hands of unscrupulous people, thanks to the dark web. They need to prepare to graciously decline requests and be prepared for some of their relationships to change after they do so.
The sooner lottery winners get advice and support, the less likely they are to have negative experiences associated with winning the lottery. Discussing the winning ticket and personal finances with a professional can be the first step toward helping a lottery winner make the most of their good fortune.