Updated: 2/25/2011 4:24 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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Land was lucky and smart I won 11 million bucks in the lottery 2 years ago I even had an lawyer represent me so I did not have everybody know I had won. Now the screwed up part a secretary who worked for the lawyer told the papers of my win. The crap really started then I had people show up at my door demanding money AND THEY WERE NOT NICE ABOUT IT
also all kinds of trash wanted money I had no less then 3 women acuse me of getting them pregnant funny thing I am gay as hell
so please do not tell anybody you have money
I believe that the lump sum is better, due to the fact that nothing is a guaranted, states may go broke and then they start looking for avenues to off set their financially problems. Take the lump sum and invest and have a great life.
Im not sure what country RodentWarrior wants to live in, but it sure isn't America. If you win the lottery and blow all the money on stupid things and poor choices... .YOU HAVE A RIGHT TO! It's your money. It is not the governments responsibility to make sure you make sound choices. What's next? I want to buy an expensive motorcycle but the commission thinks that's a mistake so I don't get my money?
Should they intervene in wills and estate distribution too?
This is rediculous. Your money, YOUR responsibility. It's called "survival of the fittest" for a reason....
GREAT article Liz. Very informative....
Lang used a great deal of wisdom...
Me if I ever win I will take the lump sum and leave the country permanently most likely.
PS: Before some smartass makes a love it or leave it comment, I am a 23 year Army vet recently retired. I have earned the right to talk **** and or express a desire to leave the Land of the Fee and Home of the Slave. Have you?
Peter: i would thank God in a big way, but forget the tithes, i would help those who need. i have never seen a church of any kind that needed, or would use my money the right way, to me they support their own and I'm sure there are worthy churches I'm just saying i haven't seen any. i would help family, friends and those that help others. mostly those who rescue animals and support those who have places for unwanted animals to retire and pass away gracefully. if God would bless me with this winning i would ask Him how to protect myself, my family and my money. I'll try my best to bless his creatures with some type of help.
with that being said good luck and God bless you all.
rodentwarrior, there is a book entitled 1984 by George Orwell you might want to read.
Even so, is it really fair to hand a huge amount of cash, millions, without a least providing the winner with an "owners manual"? Perhaps, a short film as to a process they might want to follow to safeguard their money. Even the information contained in the above article would be a nice start.
Maybe, an appropriately trained state employee could be available to provide an overview of some possible choices and their advantages without making specific recommendations regarding legal or financial professionals . All this, could be OPTIONS, options now and not anything more, that the winner could be made aware of.
Though the winners are adults, for many it seems to me giving them huge amounts of money without some guidance would be like throwing a loaded gun to a child and saying, have fun. Somehow, it doesn't seem fair. Again, with an adult, it is only appropriate to give them the OPTION of said guidance.
As far as taking the money now or later, for those not accustomed to having money, I would strongly recommend the annuity. Even then, you would have some borrow on the future payments.
grant people clearance to procreate? Only one person at a time can piss away a small fortune, and other people do end up with that money, but millions of unqualified people have had babies.
You seem to know what's best for everybody. Can you help?
@Rodentwarrior, You really need to just stop posting because you have of a slave! Meaning you feel that ever move of a lottery winner needs to be controlled, but did anyone control them from paying their money for the ticket? Do you know how many years a person may have been playing the lottery before they may actually win? Which means they have already spent a substantial amount of money in the state lottery no one was telling them when to play and when not to play. the cashier took the money and put it in the register and the ticket was sold, so how in the world could you believe that they should have some one tell them what to do with it. Advising them if they want it is okay, but it would be their decision just like it was their decision to purchase the ticket. It's okay for you to have someone to robot you with your winnings if you like because their your freedom of choice, but to mandate it is ridiculous! You are truly special and not in a good way. Bondage is over in every aspect! You may control money that you give to your kids in a trust to make sure they are secure at a certain age,even when they are grown, but you can't control how they spend it once they get. Also, you gave that to them, the lottery doesn't give money to anyone they win it or in so many words have invested in it so only a fool would think it should be controlled. Please go take a nap and wake up to reality!!!!!!!
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