8/20/2012 2:15 PM ET|
You won the lottery! Now what?
Everyone knows what to do first: Jump for joy. But the moves you make after that are crucial, and missteps could cost you dearly.
Michael Lang's boss had just two $5 bills in his wallet when Lang came by to collect for the weekly office lottery pool.
The boss hesitated after opening his wallet, so Lang reached over and plucked out one of the bills. "You don't want to be sitting here if we win," Lang remembers saying.
The next morning, Lang was home sick from his job as a child-support investigator. When the boss called, Lang made his apologies and offered to come in if they really needed him. "Forget about that!" his boss said. "We won the lottery!"
That was in 2006, when 13 members of the Missouri child-support-enforcement team shared a $224.2 million Powerball jackpot. For the past five years, Lang has been living the life that lottery-ticket buyers dream about when they shell out their cash.
And it's a good life, Lang is quick to point out. He was able to retire early and pursue a long-held dream: owning a hunting and fishing lodge. But it's also been a stranger and more complex journey than he could have imagined.
"I thank God every day for being blessed this way," Lang said. "(But) everybody does take some advantage of you when they find out you have money."
We talked a while back about what Lang has learned about how to win the lottery. Such as:
Don't rush to claim the prize
One of Lang's regrets was that he let his co-workers' enthusiasm trump his natural caution. A former St. Louis police officer, Lang was wary of the attention and bad guys the publicity could attract, but he wound up acceding to the group's wish to claim the winnings shortly after the prize was announced.
If he had it to do over again, Lang said, he would put off claiming the prize while lining up the financial professionals he needed to help him manage his share.
"I just wanted to be able to prepare for it," Lang said.
If you value your privacy, you may have the option to collect your winnings without a news conference, although your name and hometown typically must be made public.
Another tip: Get an unlisted phone number as soon as you can. People from around the globe are going to try to reach out and touch you for loans, gifts, charitable contributions and funding for their great business ideas.
Get your team together
At a minimum, you'll need an accountant, a lawyer and a financial planner. Don't expect much help from the lottery itself, because it can't risk the legal liability of offering advice. Plenty of financial professionals will offer to assist you -- Lang said he and his co-winners received "hundreds" of pitches from financial advisers of all stripes -- but without significant research you won't be able to tell the crooks and incompetents from those who know what they're talking about.
Lang said many of his encounters with these advisers weren't good. One lawyer told Lang he could quickly prepare a trust for $17,000 -- a trust Lang actually had done for $2,500. A financial adviser Lang interviewed but opted not to use sent him a bill for $450.
"I sat in his office and drank a bottled water, and he wanted me to pay $450," Lang said. "I asked him to itemize what he did for me that was worth $450, and I never heard from him again."
You may not be able to rely on friends and family for referrals, unless your nearest and dearest happen to be multimillionaires with advisers skilled in managing big sums. You may instead want to find out who advises the wealthy in your community and start your interviews there. But don't assume the rich always know what they're doing. Think Bernie Madoff.
The Certified Financial Planner Board of Standards has advice about choosing a planner, and the American Institute of CPAs can direct you to a certified public accountant with a financial planning designation. The National Association of Personal Financial Advisors represents fee-only financial planners, many of whom specialize in "high-net-worth individuals" -- that is, rich people.
Lang started his search for legal advisers by asking who represented the largest companies in St. Louis. A Catholic, he settled on the company that advised a Catholic church in his area.
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