According to the Powerball lottery, your odds of winning the entire jackpot are about 1 in 292.2 million.
Meanwhile, according to the National Weather Service, the odds of being struck by lightning in a given year are 1 in 1.2 million.
However, let’s say you are fortunate enough to win the lottery and avoid all lightning strikes. What should you do next?
Take a deep breath
You have a set amount of time to turn in your ticket for the prize. The one thing you don’t want to do is act hastily without getting some proper advice.
Sign your winning lotto ticket
Like a check, a lottery ticket is considered a bearer instrument. Whoever signs the winning lottery ticket and presents a valid photo ID can claim the lottery prize.
You want to ensure that even if you lose your winning ticket, you’re still covered if someone else tries to claim it. Sign it.
Secure your ticket, and your mouth
After signing and making copies of your winning ticket, lock it in a personal safe or inside a bank safe deposit box.
While you might want to tell everyone about your newfound wealth, you shouldn’t. There are going to be people who want to cash in on your good fortune and want some handouts.
It is no wonder that people who win the lottery want to remain anonymous. Some lottery winners reporting instances where they received death threats, strangers asking for money or people saying they are owed money.
Get professionals on your side
You’ll need the guidance of at least three people: an attorney, an accountant, and a financial planner.
Find a lawyer who is familiar with taxes, estate planning, asset protection, and lottery laws. Furthermore, the lawyer will be handy when it comes to protecting your anonymity by acting on your behalf.
For example, the lawyer can collect the prize money for you and even set up an anonymous fund for the lottery to write the check out to, rather than putting your name on all the paperwork.
Next, hire an accountant. This person will handle all the tax matters and keep you out of trouble with the IRS. After the government takes its initial cut, there are still more taxes to pay.
Find a qualified certified financial planner (CFP). These folks are well-versed in the tax and legal aspects of sudden wealth.
Financial planners are often the quarterback of the team by working with other members of your team and helping with tax minimization, asset protection, and other advanced strategies.
Once you have received the money, your financial planner will manage your assets and provide ongoing reporting, monitoring, and adjustments to your plan and investments based on your needs, wants, and wishes.
Choose a payment option
You have 60 days from the day you present your winning ticket to determine how you want to receive your prize.
You typically have a choice when you win the lottery. You can receive a one-time, lump-sum payment, or 30 installments over 29 years.
If you choose the lump-sum payment, you will receive your prize winnings upfront, and immediately will owe income tax on the full amount.
If you choose the installment plan in the form of an annuity, each installment payment will be taxed instead.
Your team of advisors can help you make the right decision as well as work with you to set up a budget, financial discipline to help stretch those dollars throughout your lifetime.
That doesn’t mean you can’t splurge a little. Many winners purchase a new home and a new car soon after winning. Going on a vacation is also very common.
Having $20 million, $30 million, or $300 million at your disposal, it’s an ideal time to finally live your fantasy — within reason, of course.