Millions of us enter the lottery every week. We do this even though we know the odds are against us. Overcoming those odds is what it’s all about. What we don’t often think about is another set of odds. Not the odds of getting rich, but the odds of staying rich if our numbers come up.
Although it seems like a lottery win would answer all our prayers, keeping even a fraction of the winnings can be hard work. Lee Ryan, one of the first National Lottery winners of all time in 1995, ended up homeless after winning—and then losing—a £6.5 million fortune. Janite Lee won $18 million in a 1993 US lottery. After donating much of it to the Democratic Party, and dining with no less than Bill Clinton and Al Gore, she filed for bankruptcy in 2001. (Reckless gambling, rather than political donations, seems to be the primary cause.)
To avoid becoming another tragic case of lost wealth, lottery winners must be very careful about how they spend their winnings. Jackpot winnings are likely to be stratospherically larger than any amount of money most winners have dealt with before, so it makes sense that some handle it badly.
With apps and websites making Euromillions betting even easier, and jackpots reaching record levels, keeping a handle on your prize money could be more important than ever. If you’ve been lucky enough to strike it rich, or if you want to be prepared for when you do, here are some helpful tips on how to handle your winnings without flushing it all down the drain.
Yes, nothing. This is the first piece of advice from Colleen Supran, a financial advisor who spoke to Wired. Supran emphasises the importance of letting reality sink in before you do anything at all with your new windfall of cash.
When you win the lottery, everyone comes calling—friends, family, charities, entrepreneurs. Once they see your name in the paper next to a huge figure, it’s not difficult for those who want your money to track you down. That’s why remaining anonymous—which is entirely within your rights as a winner—is advisable for anyone who worries about losing control of their spending post-win.
Andy Carter is a Winners Advisor at the National Lottery. He stresses that it is “entirely the winner’s decision if they want to share news of their win.” The advisory team still keeps in touch with anonymous winners as part of an ‘aftercare programme’, making sure they have access to the financial and legal advice they need.
Staying out of the limelight allows you to step back and come to terms with the news of your win without facing pressures from outside sources. If you choose to go public with your win once you have your finances in order, that will still be an option down the line.
Hire a team
According to lottery lawyer Jason Kurland, the first thing you should do when you find out you’ve won the lottery is hire an attorney, an accountant and a financial planner. Kurland says you should do this before you’ve even claimed your winnings.
There are many advantages to doing this that only people who have dealt with large amounts of money will think about. First of all, this core team of advisors can set up a trust or ‘entity’ to claim the money, which will help you keep a low profile and maintain control.
Secondly, your finance team can help you say no. Kurland offers his clients a ‘bad guy’ service. This means he offers advice before clients spend any of their winnings, and allows them to blame him if they want to turn down money requests from their friends.
With your team assembled and privacy intact, you are in the best position to sensibly spend your winnings in any way you like, and start living the good life. Just remember to think any purchases through, and if you have any questions, talk to your advisors. That’s what they’re there for.