As players pick their numbers today and tomorrow in 45 states plus Washington, DC and the US Virgin Islands – and dream up their chances of winning – few really know how they would protect themselves if they hit the jackpot. Financial experts have resources available for lottery candidates. Here are seven tips gathered from lottery boards, insurance companies, private wealth management firms and others on what lottery winners should do to keep their personal lives and money safe and secure.
1. Beware of scams
Lottery players need to watch out for scams whether they have won the jackpot or not. Some scammers are falsely identifying themselves as lottery officials in an attempt to steal money from unsuspecting people, Mega Millions warns. “No Mega Millions representative would call, text or email anyone to win a prize,” the multi-jurisdictional lottery board’s website states. Lottery scammers are “persistent,” using real or fake company names and offering a “free game” or “prize” to try to appear legitimate, Mega Millions warns. Mega Millions warns players to be aware of scammers.REUTERS/David Dee Delgado Scammers may also ask for personal information or payments that they claim are for “taxes” or “fees.” Helpful tips include being suspicious of any lottery winnings from a game that’s never been played, as well as being suspicious of emails that come with “misspellings or bad grammar,” according to Mega Millions. The lottery board also warns that people should be suspicious if a contact asks to keep correspondence confidential or asks for banking information. “No real lottery tells winners to put up their own money to collect a prize they’ve already won,” notes Mega Millions.
2. Get professional advice
Lottery winners should assemble a group of financial experts if they’ve won a big prize, Mega Millions advises. The lottery board recommends that winners consider resources, financial planning tools and personal experts from the American Institute of Certified Public Accountants, a national professional organization that has more than 428,000 CPAs affiliated with it. Attorneys and financial advisors may also be worth considering, according to State Farm Insurance.
3. Keep this ticket safe!
Lottery winners should make “multiple copies” of their winning ticket, according to State Farm. These copies can be presented to lawyers or accountants, while the original ticket remains stored in a personal safe or bank deposit box. State Farm also cautions that lottery winners should read each game’s rules and contract before signing their winning ticket. “In some cases, signing your ticket can prevent you from creating a blind trust later,” notes the insurance company’s article, “What to do if you win the lottery.” Experts advise players to create a financial plan for their winnings.Brandon Bell/Getty Images A financial advisor in the New York area recommended that you place the ticket in a bank safe until you have completed consultations with your legal and financial advisors. He also said to understand the rules in your particular state about whether or not you can remain anonymous. “It’s very important,” he said.
4. Protect your privacy
Lottery winners should keep their winnings private before turning in a ticket, State Farm advises. Winners should also be prepared to change their contact information. This is because many lotteries share names or require interviews or press conference participation for transparency purposes. “Be sure to change your phone number and set up a new PO Box in advance to avoid being inundated with requests,” State Farm writes. The insurance company notes that some winners may be able to form a blind trust through their attorney so that the winnings are received anonymously.
5. Create a money plan
While forming a group of financial experts is an important step for most lottery winners, State Farm says winners should make a general list or plan of what they want to do with their money. “Write down your personal, financial, lifestyle, family and philanthropic goals and come back to this plan later to help keep things on track long term,” the insurance company says.
6. Put off making big decisions
Winning a few million dollars can tempt any person to make a big purchase or change their life – but private wealth managers at Cresset Capital advise against it. “You need to think about how your job contributes to your sense of self and mental well-being,” says Cresset Capital in its article “What to Do (and Not to Do) If You Win the Lottery.” Instead of opting for early retirement or making another dramatic move, the Chicago-based financial planning firm says lottery winners may want to consider taking on part-time jobs or pursuing higher education, volunteering work or hobbies full of passion. Cresset Capital also warns lottery winners not to “become ATMs for their family and friends in order to avoid prematurely jeopardizing financial plans. “This doesn’t mean you should keep all the money for yourself, but take the time to think about how and when you want to give so you don’t resent or end up being used for your wealth,” the company writes.
7. Ask yourself if you should take a lump sum
Some winners are fine with receiving a lottery lump sum, while others may benefit from receiving an annuity payment (a series of equal payments spread out over a period of time). Cresset Capital advises winners to seek information from a financial advisor to determine which option is best for them. “Compare your after-tax returns, investment returns, life expectancy, etc.,” writes Cresset Capital. “Careful planning and consideration can result in a higher total value of your win.” Deciding how to take profits, by the way, can change based on your age, health, marital status and more, said a New York-based financial advisor consulted by Fox News Digital . All these things could affect the best decision to be made in this regard.
And one more bonus tip
If a lottery winner or someone close to a lottery winner has a gambling addiction, Mega Millions says getting help from a gambling addiction association can be a key step. Two organizations recommended by the lottery board are the National Council on Problem Gambling and Gamblers Anonymous. The National Council on Problem Gambling has affiliate locations in 34 states, while Gamblers Anonymous has hotlines in every state along with in-person and virtual meetings.
