Hey there, Legal Tea Listeners –This is your host, Jenny Rozelle. Welcome back for another Legal Tea episode today, episode one hundred and seven! Geez. That’s a lot. Anyway … Today’s topic is a current trend … on this type of episode, we dive into something going on in the current time or that I’ve stumbled across on the news or social media, that is pertinent to my little estate and elder law world. Well, today’s episode is inspired by the recent news on the super high lottery … was it like the Powerball or something that was recently like at $1 BILLION dollars? Whatever it was … it was a lot, a lot, a lot and it got me thinking, “What if one of my Legal Tea Listeners or one of my clients actually won the lottery?” I know it’s a pipedream, but juuuust in case it ever happens, let’s talk about what you should do – and if you do hit the lottery and you have listened to this episode (and intelligently deal with your lottery winnings), I won’t hate you if you throw my podcast a bone … and help me hire an assistant!
Now, before we really dive in, this episode is inspired by an article on Yahoo (that is of course linked in the source links for the episode), which was based on tweets shared by a gentleman by the name of Andrew Lokenauth (his Twitter handle is @FluentinFinance), who is a financial executive and big deal on social media – he shared “five steps every lottery winner should take” so give credit where credit is due … the Yahoo article and my episode here are byproducts of Andtew’s helpful tweets and tips. So, go give him a follow – and while you’re at it, give me a follow, too, at the handle @JennyRozelle.
Alrighty, let’s get started, shall we? For a second, let’s pretend you have a lottery ticket in hand and you are checking your numbers … and by golly, you are the lucky winner! Before you start texting people you won and post it on social media that you won, STOP. STOP right there and don’t do any of that nonsense. First, breathe and second, come back to this little episode on what you should be doing, what you should be considering. As Andrew shared, I’m going to give the 5 things you should absolutely do if you hit the lottery … starting with #1, hiring a professional team. Andrew suggests the following professionals: an estate planning attorney (specifically one that works with high net work folks), a tax attorney, an accountant, a financial advisor, a security professional, and a personal assistant.
I don’t disagree with any of those suggested professionals, and in fact I think a “security professional” is such a wise addition that I had not really considered, but it makes sense. When you’re talking about lots of money, there is no tellin’ what someone would be willing to do, right? It is kind of scary and sad to say that, but I think that’s true. It’s just part of the world we live in. Furthermore, the awesome thing about professional relationships, like an attorney-client relationship, is that they are confidential. So, if my BFF, Susie, wins the lottery, calls me to assist/provide legal advice, I can’t tell the news channels that my BFF Susie won the lottery. That would, in fact, be a violation of many legal ethics/confidentiality rules!
But even beyond the privacy factor, those professionals, like the lawyers, accountant, and financial advisor, are going to be crucial in helping you develop a sound plan for not only collecting the prize, but how to structure your now-really large estate/financial plan, that is also now going to come with some significant tax concerns. Hence why you need all these professionals on your team BEFORE you collect the lottery winnings. One last note on the “professional team” Andrew noted – I’m not sure if you caught when I said this, but a personal assistant was one on the team. That, too, makes a ton of sense to assist you in day-to-day life – because guess what? Life is going to change massively and rapidly. They can help arrange various appointments, transportation, travel arrangements, personal shopping, etc. A personal assistant would be a fantastic addition to the team (to at least consider!).
So, the second thing on the “5 things you should do if you hit the lottery” list is: Make copies of your winning ticket. As Andrew shared, “You don’t want to risk losing your winning ticket, so it’s a good idea to make copies of it immediately.” Andrew even suggested a couple additional things about the actual ticket – 1) Hide the ticket somewhere; that is, keep it protected in a safe place. And 2) you could even make a digital copy of the ticket and store it in an encrypted cloud storage and/or an external hard drive – as a back-up of the winning ticket. As a lawyer, who likes to overcomplicate everything(!), I wonder if the original ticket got lost, if they’d accept a copy of the winning ticket. I feel like there’s probably fine print on the ticket or the rules of playing the lottery. If someone wants to look, go ahead and let me know!
Now, shifting to the third on the “5 things you should do if you hit the lottery” list which is: This is another super important one! IF your state allows you to collect the winnings anonymously, do so – you will not regret that decision. So, that’d be one of the first things the lawyer on your professional team should be looking into – IF your state allows you to collect anonymously so and regardless, what legal structures, whether it be trusts or a company like a LLC, can be created RIGHT NOW to get the winnings collected ASAP and if possible, done so anonymously? Perhaps your state allows you to create an LLC, make the registered agent the lawyer (who again, has confidentiality rules to you), and make the “owner” of the LLC” a trust with a trustee that is not you (to protect your identity).
One last note on this: As Andrew shares, never ever sign the ticket until after you’ve discussed a plan with your professional team. Some states don’t allow you to review or amend the signature line once signed. As a blog by Stuart Branigin shares, there was a lady that won the lottery in New Hampshire – anyway, well, she later admitted that it was a “huge mistake” when she signed her winning ticket because the state lottery officials would not allow her to remove/white out her name and replace it with a trust she had created to protect her identity/protect herself. So, she ended up having to collect the prize and everyone under the sun knew it was her who won/collected the prize. It became “too late” after she signed the winning ticket. She should have waited to talk to her professional team, then that professional team should have had her sign the ticket/collect her winnings in a way to protect herself. Yikes!
Alright, shifting to point #4 on the list of “5 things you should do if you hit the lottery.” Point #4 is: Well, this should probably be #1, but now I’m knee deep in this episode, but point #4 is DO NOT tell anyone you won. If you can somehow keep it as private and your circle the smallest possible, the more you are able to do that, the better. As Andrew states, “This might be a hard rule to follow, but resist telling everyone you know that you won the lottery, as this could put you in danger.” What did I say earlier -- Before you start texting people you won and post it on social media that you won, STOP. STOP right there and don’t do any of that nonsense. First, breathe and second, come back to this little episode on what you should be doing, what you should be considering! Keep your inner circle TINY. Otherwise, as Andrew states, “Never tell anyone, so you don’t become a victim of robbery, extortion, or death.” I know that sounds crazy and dramatic – but I think we all know people who have done far less severe things for money.
Finally, the last point, point #5 on the “5 things you should do if you hit the lottery” is: Even after everything we discussed here AND collecting your winnings, become and stay as private as humanly possible. There are plenty, plenty, plenty of stories and articles out there that share what’s happened to people who hit the lottery – their lives are ruined. I know most people say, “I’d do the RIGHT thing with that kind of money!” and they say, “How do these people file bankruptcy and stuff after winning?” Well, clearly it’s possible and actually, bad things end up happening all the time to lottery winners because they don’t follow these five pointers. Honestly. I linked a Huffington Post story in the source links for this episode – which shares story after story about people who ended up WORSE off than before they won. There’s even a story about someone that won the lottery TWICE … and she’s completely broke now, according to the article.
Furthermore, as Andrew shared, “70% of lottery winners end up broke and 33% declare bankruptcy.” Those numbers are completely … just wow. Just sad, really. He further recommended to “Delete social media, change your address, and get a new phone number and email address.” Such tiny little shifts that will pay HUGE dividends. I think that’s why some people even think that hitting the lottery would be bad – because it’s almost like the cards are stacked against you, 1, and, 2, you almost have to become a hermit/a recluse to protect yourself – which stinks. Or, you could be like some of the “success story” winners out there, that continued to show up for work, continued to live a normal life – and no one knew they hit the lottery. That is because they followed most of these pointers, but rather than obviously starting a new life – they continued their life, which didn’t tip anyone off that they won. Since we can’t end on a sour note, I also linked an article about “success story” winners – those were fun to read about. There was a story where the winner donated their winnings to assist in medical research to help find a cure for a disease that killed their granddaughter; or one where a guy bought a whole bunch of acreage and started a camp for kids to go to to ride horses, do crafts, swim at a lake, etc. with an aim to disconnect from video games and cellphones. OMG! I love that.
Let’s end on that note, shall we? So, if you, my friends, happen to win the lottery, I’m now equipping you with this episode to support you in doing the “right thing.” Should we put some good vibes in the air and say WHEN one of you happen to hit the lottery, not if! I’ll cross my fingers for you! As I always tell clients, my problem with winning the lottery … is I have to play to even have a fighting chance at winning. And well, I don’t play. Some would say that’s smart, some would say “Why would you not at least try?!” Alrighty, I’m out of time, friends, so let’s wrap this episode up -- next week’s topic is on estate planning of the rich and the famous – on that episode, we’re going to dive into what happened estate-wise following the passing of well-known actor, Paul Walker, who I remember my sister having a massive crush on when we were little (I know she doesn’t listen to this, so I’ll embarrass her and her not even know – I’m so mean!) … anyway, Paul did some good things, Paul slipped on some things too. So, it’ll be a good one to identify things done well and things done not-so-well. We will dive into that next Tuesday, Legal Tea Listeners! Talk to you then and stay well!
Sources:
Andrew’s Twitter/X Handle: @FluentInFinance
Comments