financial team for lottery winners

Best Financial Advisor for Lottery Winners

As a lottery winner, you are likely to be barraged by tax, legal, and financial issues.

The only method to successfully navigate your way through the complexity is to have a team of experts who are the best at what they do. The question is, who is the best financial advisor for lottery winners? I’ve specialized in financial planning and investment management for sudden wealth recipients for over two decades, but if I won the lottery tomorrow, you can bet one of the first things I’d do is build my advisory team. There is too much at stake not to have the best minds and latest strategies available to you.

So often when I start working with a sudden wealth client months or years after they received their money, I cringe at the tax, legal, or financial strategies they could have employed if only they had better advice. If you win the daily scratcher for $1,000 or if you receive a $5,000 insurance settlement, there are limited options of which you can take advantage. But if your sudden wealth is significant, there is a whole world of options and strategies that can potentially save you not just a little, but a lot of money. How much? I once watched a client write a $15 million check to the IRS for federal income tax. It sounds like a disaster, but if she hadn’t hired a team of experts, that check would have been closer to $25 million. By working with the right specialists, she was able to save close to $10 million of state and federal income tax. If her team had been made of a typical CPA, a general business attorney, and a normal financial planner, she would have left millions of dollars on the table. That $10 million of “found” money over her life could be worth over $100 million if invested. As they say, “A billion here, a billion there, and pretty soon you’re talking about real money.”

The best financial advisor for lottery winners will work with you even before you receive the money.

They will be a critical resource to help prepare you for the money and help you create a comprehensive financial plan. A financial advisor well-versed in the tax and legal aspects of sudden wealth can be an important part of your team – working with and suggesting tax minimization, asset protection, and other advanced strategies with the other members of your team. And of course, once you have received the money, your financial advisor will manage your assets and provide ongoing reporting, monitoring, and adjustments to your plan and investments.

The complaint of many sudden wealth clients is that they are paying all of these experts but that nobody knows what the others are doing – the CPA doesn’t know what the estate attorney is doing and is not aware of what the insurance guy is recommending. This can lead to inefficiency, extra fees for you, sub-optimal planning, and gaping holes in your estate, asset protection, and financial plan.

I’ve learned that in order to create a comprehensive financial plan, somebody has to step up and manage it, but what usually happens is the attorneys and CPA have their heads in the details and the client has to manage everybody and everything. Not only should the client not have to take on this job – especially with what they are paying their advisors – they are often not qualified to know who to bring in or even what questions to ask.

The best financial advisor for lottery winners should not only play a critical role in the early stages of sudden wealth, but I’ve found that they are best equipped to be the person managing the other advisors, coordinating and overseeing the plan, and the person you call first when there is a question. When the financial advisor fills this role, they are called the “financial quarterback” because they see all of the moving parts of the client’s tax, legal, and financial life. They are the ones who can identify when to bring in other experts and make sure all of your financial bases are covered.

But why is the financial advisor best equipped for this role?

Many aren’t, and that is why it’s important to work with a comprehensive financial planner – someone who can provide expertise in the areas of insurance, cash-flow management, retirement planning, taxes, estate planning, asset protection, and investments. It sounds like a tall order, and it is. Most financial advisors are simply not qualified (regardless of what their websites, TV ads, or brochures claim), but you’ll learn how to separate the pros from the amateurs. We suggest you look around, ask for referrals from family and friends, and always hire a fiduciary financial advisor.

Who is the best financial advisor for lottery winners? Find out…

Lottery Financial Advisor: What to do if you Win the Powerball Lottery

Dear Florida Powerball lottery winner, congratulations on your win!

You beat the odds (1 in 175.2 million) and have the distinct honor of being the largest single lottery winner in U.S. history. As someone who has developed a national reputation for working with sudden wealth recipients – or as a client recently remarked a “lottery financial advisor”, I want to share with you a few ideas on how best to handle the rush of emotions of winning — and possibly the anxiety and paralysis over what to do now — with a few best practices I’ve learned over the years of working with clients who come into a windfall.

Here are six things to do before you claim your Powerball winnings:

Sign the winning Powerball ticket

You want to make sure you immediately sign the winning lottery ticket. Lottery tickets are “bearer” instruments. This means that whoever holds the ticket is the winner. I would also suggest you take a photo and video of yourself with the ticket. If something unforeseen happens, these steps go a long way to prove you are the owner of the ticket.

Take care of yourself

This step has nothing to do with your lottery prize and everything to do with you and your health. While everybody handles these things differently, it’s not uncommon to experience anxiety, paranoia, or even strange out-of-body feeling where things move in slow motion as if you were watching your life on a movie screen. For some, these feelings are fleeting, but for others, they can persist and make it hard to sleep, function, and make logical decisions. So, first and foremost is making sure you take care of yourself. Seek professional help if necessary.

Decide if you want a lump-sum or an annuity

The next step – and one that is usually glossed over — is to figure out just exactly how much you’ve won and whether you want a lump sum or an annuity. Although the stated prize is $590 million, it’s a bit misleading. With big lottery wins like yours, you have the option of taking a lump sum payout or to receive the payout over time. If you choose the lump sum option, the amount is $370,896,780.50. If you are a U.S. citizen, the IRS will automatically withhold 25% for taxes – providing you $278,172,585.40. Of course, you’ll be on the hook for more than 25% to the IRS. The real after-tax amount will be closer to $224,000,000.But instead of the lump sum amount, you have the choice of receiving 30 payments of $19,683,000 per year for 29 years. Although a great majority of lottery winners opt to receive a lump sum amount, there are definitely some advantages (and disadvantages) to taking the payout over time. You’ll want your CPA and financial advisor to “run the numbers” for both options and discuss the pros and cons of each. The big advantage of taking the money over time is that it provides you a “do-over” card. We’ve all heard the stories of lottery winners who have lost it all in a few short years. By getting the money over time, even if you are careless the first year, you get 29 more chances to get it right. It’s definitely something to think about sooner rather than later because you have 180 days from the drawing to claim the prize, but if you want the lump sum payout, you only have 60 days from the drawing. Also, the day you claim the prize, you will need to make your decision, so you’ll want to get your team assembled so they can crunch the numbers for you.

Assemble your team

With a lottery win as big as yours, you’ll want to make sure you have a stellar team that can help you make the best decisions. You’ll want an attorney – actually, you’ll undoubtedly use several types of attorneys (business, tax, trusts, and estate), but don’t worry about finding all of these on day one. Find a good attorney to guide you through the initial steps and who can introduce you to others as needed. You will also want a CPA and a financial advisor skilled in managing sudden wealth.

Make a publicity plan after winning the Powerball lottery

Unfortunately in Florida, you don’t have the option of remaining anonymous. As soon as you claim the prize, your little town of Zephyrhills, Florida and the rest of the world will know your name. Journalists and TV reporters will come from far and wide. They will dissect everything you’ve ever done and will want a piece of you. The best approach is to develop a public relations strategy to control the message as much as possible. Figure out what you want to share and what you don’t and decide if you will be your own spokesperson or if you want to have someone else speak on your behalf.

Don’t lose yourself to Powerball lottery winnings

Lottery winners will often complain that after winning their lives are turned upside down and that they are thrust into a new life. It’s hard to keep things exactly as they were when you get a check for over $200 million, but at the same time, you don’t want to lose the aspects of your life you now cherish. Step outside the craziness of the situation for a moment, and make a list of Who and What you love about your life that you don’t want to change. Money is best when you use it to improve your life, not necessarily change it.

Follow these six steps after winning the Powerball lottery to get control of an otherwise seemingly out of control situation. Regardless of what you are feeling now when the lights fade and the cameras go away, things will calm down and you will be able to enjoy your newfound wealth. While you’re here, please read about how we help Powerball lottery winners, sign up for a free email course, or read more related blog posts.

Before you claim the Powerball lottery prize, there are six critical things you must first consider. ]]>