After winning the lotto, your life can be changed forever, for the better, if you play your cards right. Before laying hands on your new-found money, there are some very important legal and personal matters that you should consider. By handling your winnings the right way, you can create even more wealth and build a family legacy that will last for generations to come.
Decide on Payout Type
If you have won a large amount of money in the lottery, one of the first things you should do is decide whether or not you would like to receive a "lump sum" cash payout, or if you would like to receive your winnings in "annual annuity" payments. By receiving your winnings in a lump sum settlement, you will get a substantial amount of money upfront. However, in addition to paying high taxes on the lump sum, the amount of winnings received will be much lower than the advertised jackpot. With the annual annuity payments, you will receive a large payment on a yearly basis instead of receiving the money all at once, and you can spread out your taxes over a period of time, paying taxes yearly instead of paying them all at one time with a lump sum. Before deciding on whether or not you will receive a lump sum or annuity payments, you should seek professional legal counsel from a tax attorney and lawyer of your choice.
Guard your ticket like a pit bull after you have won the lottery and be very discreet about your winnings. If you don't want to claim your money right away, due the the media frenzy, you can wait a while. However, you should check with the state lottery headquarters to determine how many days you have to claim your winnings.
The next thing to do after you win the lottery is to decide whether or not you are going to quit your job, close your business or start a new business. Consider your age and consider how much money you have won. If there is obviously enough money that you won't have to work anymore, then quitting your job is not a problem. If you decide to invest in a family business to leave a legacy for your family, you should do your research to determine whether or not it is a good investment and also consider whether or not your family members are willing to be diligent in running the business if you are no longer able to run it.
Practice saying the word, "No." When you win the lotto, long-lost "relatives" and "friends" will start coming out of the woodwork. Don't be gullible and get sucked into giving your money to individuals, especially those who have mysteriously appeared into your life. For example, if someone comes forth saying that you are their long-lost parent, request a DNA test. That's not being harsh; it is being cautious and wise. Consider changing your telephone number to maintain your privacy. After the word has been released that you are the lottery winner, your phone may start to ring constantly by individuals or organizations asking for a portion of your money.
Spend a Little, Give a Little, Save a Lot
There is nothing wrong with purchasing things that your heart desires if you win the lottery. Just make sure that after you purchase it, you have enough money to maintain it. For example, if you win $8 million in the lottery, you don't want to go into debt with a $5 million home and two Rolls Royces. Spend within your means. It's also okay to give a little to your favorite charity or organization. Give wisely and not excessively. Spend in a way that will allow you to save for the future. Consider IRAs, savings bonds and mutual funds, but always consult with a financial advisor or accountant first. Look at ways for your money to make money for you while it is being saved, instead of sitting in a low interest?bearing savings account.