Powerball winners now face their toughest odds

Three winning tickets were sold in the $448 million jackpot, but the newly rich will face daunting and even life-or-death choices.

By Aimee Picchi Aug 8, 2013 11:48AM

Wealthy couple celebrating in a car (© Image Source/Getty Images)The holders of the three winning tickets in the $448 million Powerball lottery have it made, right? After all, their millions will surely solve problems big and small. 


But if history is anything to go on, winning comes with a dark side. That means the Powerball millionaires are now facing their toughest -- and most gut-wrenching -- odds: how to maintain their windfalls and avoid the unpleasant fates of many previous winners. 


Those unsavory outcomes include murder, bankruptcy and premature death. As of Thursday morning, no one had come forward to claim the prizes. Two of the winning tickets were sold in New Jersey and one in Minnesota. (Sorry, Pennsylvania, which had held the record for the most number of winning Powerball tickets.)


Poor financial choices are the biggest problems facing lottery winners. Extra-big winners incur a larger chance of filing for bankruptcy, according to a 2010 paper from researchers at the University of Kentucky, University of Pittsburgh and Vanderbilt University. Winners of jackpots of more than $150,000 were more likely to file for bankruptcy three to five years after winning, compared with winners of less than $10,000.


Stories of bad investments from lottery winners are legendary, such as that of William "Bud" Post, who won $16.2 million but allowed his siblings to persuade him to invest in schemes such as a used-car lot and a Florida restaurant. His obituary described him as an "unhappy lottery winner." At his death, he was reportedly living on a $450-per-month disability check.


Those stories underscore the necessity of shelling out for a financial adviser, or even a team of experts, to help keep winners from making poor decisions. According to Pacifica Wealth Advisors, which bills itself as a firm that works with "sudden wealth recipients," winners should also plan on using several types of attorneys, such as experts in taxes and trusts.


Aside from losing it all, lottery winners also have to cope with "positive income shock" -- or, as the Daily Beast calls it, the "lotto death curse." Windfalls can actually increase the risk of death, the publication notes, citing research from the Paris School of Economics.


Sometimes early death comes from hard living, such as with British winner Keith Gough, who died at 58 after spending his fortune on drinking and horse racing, among other items.


Then there's death at the hands of other people, such as in the case of Abraham Shakespeare, who won millions in 2006 and was murdered by Dorice Moore after she befriended him on the pretense of writing a book about him. Moore eventually became his financial adviser and swindled him out of his fortune, then shot him and buried his body in her backyard. Moore was found guilty of the murder last year. 


The stories of death and failure might just be enough to make some people glad they didn't strike it rich in Wednesday's drawing. 


Follow Aimee Picchi on Twitter at @aimeepicchi


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135Comments
Aug 8, 2013 1:50PM
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Dear God,

Please give me the chance to show that winning a multi-million dollar lottery will not ruin my life!

Aug 8, 2013 12:44PM
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"Extra-big winners incur a larger chance of filing for bankruptcy"
You would really have to be an idiot.

Money can not fix stupidity.
Aug 8, 2013 12:18PM
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There is a certain percentage of people who are consistently bad with money.  They make terrible financial decisions and never seem to learn from their mistakes.  You could give them $5k or $500k or $50 million and they would find a way to go broke.  Most of these same people consistently play the lottery (another poor financial decision) and they make up a majority of the jackpot winners.
Aug 8, 2013 12:11PM
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Why not write some stories about the hundreds, if not thousands, of lottery winners that handled their winnings just fine?  Why concentrate on the ones that had no clue as to what to do with so much money??  Why, you ask?  Because the loser winners make a better story.  Simply that.
Aug 8, 2013 2:05PM
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Hiring anybody to manage YOUR money as a sure way to lose some of it and gives them an opportunity to LEGALLY steal a lot of it. Keep your mouth shut and learn how to manage your money yourself if you don't already know how .
Aug 8, 2013 12:06PM
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Hire a GOOD accountant and lawyer, take out a hundred grand to live on for a year and then hide the rest of the money in T-Bills for the first year to get over the newness it all. 

 

Take all the finance classes you can find, not the ones at convention centers, but at universities and colleges, and learn how to manage before you start investing and spending.

Aug 8, 2013 2:03PM
Aug 8, 2013 1:37PM
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The amounts of lotteries in this day in time are indeed ridiculous.   Why not divide lottery into payouts to
citizens of 2million apiece or so to a larger number of winners of some sort?.........it would help LOTS of people, rather than one or two who hit a ridiculous win of far too much money.......no one needs many, many millions to enjoy life!

Aug 8, 2013 12:43PM
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I actually think that lottery winners who handle their winnings in a reasonable and consistant manner will run far and run fast AWAY from any publicity.  I'm pretty sure I would.  I know some lotteries require that you attend a news conference type deal when you win, but some don't.  If able, I would annonymously claim the winnings and continue to live my life style as before.  AND hire an army of legal and financial helpers to make the best use of my winnings.
Aug 8, 2013 1:51PM
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There must be a rule that says only - idiots - can win the lottery. Simplest way is to put most of it into a trust. Keep enough out so that you have money to blow and get that out of your system. You then sit back and enjoy a nice fat check every month from the trust.

Aug 8, 2013 12:41PM
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Idiots will always be idiots. (2008, 2012)  Money just opens them up to opportunists!

Aug 8, 2013 2:11PM
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With my luck I will never find out what it's like !!! :()
Aug 8, 2013 2:27PM
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I've OR we have watched this for years read about them and such...

 

The ones that seem to lose everything after a big win; ARE the ONES that never really had much money before..And are too trusting..

 

And you had better be very, very careful about who you hire to help you with the windfall !!!

Because they will be lining up at your door..

Go back to old and trusted friends....Don't make NEW ones.

Aug 8, 2013 1:56PM
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Easy come, easy go. Nobody who wins the lottery expects to win. So what if you blow all the money? All these experts giving advice are the same ones making a handsome living milking people out of their money. Better to give it to friends, family, neighbors, associates. Spread the joy around. 
Aug 8, 2013 3:28PM
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O.K., here we go again. MSN putting a negative spin on these very fortunate people who just had the best day of their lives. Putting a "curse" on them, with not even the least bit of "factual evidence" to support those claims, really? Another attempt to sensationalize, with a negative spin, an event that should be hailed as a happy occasion. The truth is, thousands of winners have given millions of dollars generously to charity, co-workers, community, children and parents, and have lived long and healthy lives over the last 30 years. Where's that evidence? How and when did winning the lotto become "bad-karma"? The only bad karma I see is on the head of the writer of this article. What a bunch of @##$.
Aug 8, 2013 2:54PM
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People are bad with their money, and that is sad. Also, you can bet the friends and long lost family will be at your door, soon!!
Aug 8, 2013 2:45PM
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If you are that dumb and lose the millions that you won in the lottery ...well do i really need to say the answer..........
Aug 8, 2013 2:19PM
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stupid lottery winners will lose all their winnings !! and blame everyone else
Aug 8, 2013 2:16PM
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But ppl go drinking and horse racing without winning millions!
Aug 8, 2013 4:43PM
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I think its funny that they dont even mention how i have been handling my life and done well..  its not rocket science to make money off of money..  but yet they make it seem like its the hardest thing to do....  won a million and i can proudly say by investing well i have made a million.. 
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