A South Carolina man finally claimed last week's mind-boggling $400 million Powerball jackpot on Monday.
Now the hard part begins.
Winning the lottery is the kind of good fortune that anyone short of Bill Gates would find staggering, let alone a guy who bought the winning ticket on an errand to "pick up hot dog buns."
History has shown that in many cases, people's lives became notably worse after they struck it rich.
"It's a really hard thing to cope with if you've never really grown up around big sums of money like that, which most of us haven't," says Colleen O'Brien, vice president and branch manager for Charles Schwab.
To help, we asked O'Brien for her thoughts on what a lottery winner should do within the first year of winning to make sure they don't blow it all.
Step 1: Don't quit your day job.
The worst thing anyone who's just woken up hundreds of millions of dollars richer can do is make knee-jerk decisions that would have taken them months to mull over under normal circumstances.
That means keeping your day job, at least for a while, and stepping back to truly contemplate what your new wealth means, O'Brien says. "Your first day, your first week, you don't do anything," she advises. "A lot of people quit their jobs and start spending before they even have the money. The first thing people have to do is sit back and wait ... and figure out what this truly means to you."
Step 2: Don't tell anyone.
In the South Carolina winner's case, his choice to remain anonymous was the wisest move he could have made, O'Brien says.
"What's the first thing that happens? All the friends and family feel like it's an open pool and the person who [won] feels an obligation to them," she says. "I would try to get my ducks in a row, wrap my head around it. If you don't tell anybody, it’s just you and your spouse who're dealing with it."
There's another reason O'Brien recommends staying anonymous: Financial firms from around the country and beyond will be beating down your front door to take your business. To them, you're the kind of cash cow that comes around once in a lifetime and they'll want to milk you for all you're worth.
Step 3: Hire a solid tax advisor.
By remaining anonymous, you have the ability to quietly and methodically assemble a team of advisors who will act in your best interests. Your top priority should be finding a solid tax advisor.
"Depending on your level of understanding, it can take at least a year to understand the different dynamics that go into taxation," O'Brien says. "The tax planning process is so critical. You have to take that [tax] money and set it aside so that it's done and it's out of the equation of your wealth."
And depending on how you plan on taking your winnings, you may have to continue to count them as income for tax purposes.
Just don't thumb through the Yellow Pages to find a CPA. Start by looking around at your circle of friends or acquaintances to find someone you think manages their money well. Ask for a referral to their CPA and go from there.
Step 4: Get your estate in order.
Depending on the size of the jackpot, chances are that the lucky winner won't plan on spending every dime within their lifetime. Finding an estate planner will be a crucial step, as they will help you figure out how to not only set aside sums for family and friends but also manage charitable giving and other strategies to help you avoid taxes.
"I really believe ... that when people have an estate planner they feel more secure about their wealth," O'Brien says. "An estate attorney will help you draft your trust and other documents related to how you want to pass down the money at death."
With an estate plan in place, you'll also have a line of defense ready in case family members start to get pushy.
Step 5: Start a budget with a financial planner.
It seems counterintuitive, but the uber-wealthy have just as much to gain from a budget as the rest of us — especially if their wealth has come on suddenly. A financial planner plays the role of coach, keeping you on track so that your cash doesn't run out before you do.
"If you want to retain your wealth, you have to have a certain kind of budget," O'Brien says. "Ask yourself what are the things that are most important to you? ... With a financial planner, then you figure that out and scale it back to an element that allows you to have some of what you want but not everything you want in the first couple of years. Give yourself time to get comfortable with the wealth. Then you can start to make bigger changes around your financial situation."
That doesn't mean letting your planner take the wheel and drive completely. You'd be silly not to stay involved in the planning process and readjust your plan at least once per year.
Step 6: Use your financial team as a defense against family and friends.
The best thing about assembling a team of financial experts to help plan your money management? You can blame them for everything when your friends and family drop by with their hands outstretched.
"If you put your professional team in place, they help guard you against manipulation a little bit," O'Brien says. "I would start by saying, 'I've got this money but it's kind of restricted in how I can use it.' If you lay it out there like that then that helps shift any of the manipulative behavior that can come in."
The bottom line: Give yourself time to get used to your wealth before you spend it.
"In the first year, you're going to have to settle in with what this is and not make a lot of decisions about spending," O'Brien says. "Make more decisions about taking care of your tax bill and planning for how you're going to retain this wealth over time."
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