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The Basics
You've won the lottery! Now what?

Believe it or not, jackpot winners face both a pile of cash and a mountain of problematic decisions. Here's a practical to-do list. Keep it handy for the next time you strike it rich.


Hitting the jackpot may be a fantasy, but what's the harm in dreaming? Here's some realistic advice on what to do if those numbers prove to be magic.

It's after 11 p.m. on Saturday night, a night like any other Saturday night. You're ready for bed and yelling at the dog to get out of the garbage. With little enthusiasm or hope, you tune in to the drawing of the state's lottery numbers on TV. A quick glance at the numbers tells you that you wasted yet another ... wait a minute! The numbers on your ticket match. You just won the lottery!

First items on a new millionaire's to do list: Scream, jump up and down a lot and hug whoever is at home with you -- even that stinky dog.

Once you catch your breath ... ask yourself, "Now what?"

Contained euphoria
You're probably pretty anxious to get your hands on all that dough. Whoa there, moneybags. Temper that euphoria. Your life is about to change in a dramatic way. Most winners take anywhere from four days to two weeks before turning in their winning ticket, says Florida Lottery spokesman Roger Sockman, of Tallahassee, Fla., because they are busy getting some vital legal advice.

"Don't collect right away," advises Michael Garrison of Garrison Asset Management in West Chatham, Mass. "Get your support system in place."

"I'd sure see the accountant before turning in that ticket about what, tax-wise, is the best thing to do," agrees Christine Hartigan, CFP, a vice president at U.S. Bancorp Piper Jaffray in Kansas City, Mo.

Therefore, here's your second new millionaire's to-do list:
  • Keep that ticket safe. Sockman says people do funny things with their tickets, such as keeping it in a baggie in the freezer, in a sock under the mattress, in a money-belt around their waist day and night, or most practical of all, in a safe deposit box.
  • Think about your job. A winning ticket is a grand thing, but it doesn't really count until you've got the cash. For now, consider just taking a little sick time or vacation, without explaining why, if possible. You're going to be very busy becoming a millionaire. You probably will quit eventually. Sockman says most winners do, even though at their original interview about a quarter claim they'll keep working. He explains, "They can't imagine how much money they've won. It's a life-changing event."
  • Find people you can trust. "The most important financial decision to make initially is who's going to be accountant, financial adviser and lawyer," says Hartigan. "And I don't think they should be the same person." If you don't have all of these people in your Rolodex currently -- and how many of us do? -- "talk to other people who use these kinds of services. Referral is the best way," Hartigan suggests. If none of your friends or family can recommend a particular professional, Hartigan recommends going to a major accounting firm, a major brokerage and a large law firm. "Ask what they'll do for you." Garrison agrees with Hartigan's advice and adds, "References are mandatory."
  • Decide on a lump sum or payments. This decision depends on what you want to do with your money and advice from your team of advisers. The lump sum will equal less than the total of the payments over however many years. "With the lump sum invested properly, you'll probably have more at the end," says Hartigan. "If you're a person who really can't control your spending, annual might be better." In Florida, the recent trend shows 75% of winners take the lump sum, says Sockman.
  • Arrange for a special account at the bank. You can't just deposit millions into your plain ol' checking account. And they don't really give you a paper check with a lot of zeroes. They give you the money by a wire transfer to your pre-arranged special account, says Sockman.
  • Change your phone number. Now that you're richer than your wildest dreams, everyone's going to want to reach out and touch you, and that will be a nightmare. So get a new unlisted telephone number.

Ticket to ride
OK, breathing has returned to normal, pulse is steady, and your financial affairs are ready. Go get that money.

Any ticket worth more than $50,000 has to be turned in to lottery headquarters, according to Sockman. Amounts may vary with other lotteries. You're about to become filthy rich, so splurge if you want to and arrive at lottery headquarters by limo, helicopter or elephant, if you are so inclined.

But don't take too much time. There's always a deadline. The Florida lottery gives winners 180 days (that's less than six months) to hand over the ticket, says Sockman. Other lotteries have different deadlines, and they take them seriously.

Once you're at the lottery headquarters, you can be sure they'll be checking that ticket over carefully to make sure it's legitimate. Sockman says no one's tried to turn in a bogus ticket in Florida since the early days of the game, but they still play it safe.

Even though it didn't buy a ticket, the government will be also a big winner. The Tax Man cometh before you even get your money, immediately making you 28% poorer. And if you're the kind of scoundrel who owes something called state-owned-debt, such as back taxes or child support, the lottery folks take that off the top as well. You've paid your debt to society and you're still a millionaire, so enjoy.

Once you turn in that ticket, the lottery is required by public information law to release your name and hometown. In other words, you can't avoid the world finding out about you. You might think about holding a press conference to get the media attention over with all at once. And besides, you might be the type that wants to crow to the world, "Look at me, I'm a millionaire!" Admittedly, this will save you time from having to call all those ex-lovers to gloat.

On the other hand, perhaps the less well-known your face is to the public, the better. In a short while, you're going to have more friends and relatives than you ever knew.

All of the changes to your life will not necessarily be good. Garrison mentions a study of lottery winners that shows a majority of these new millionaires end up overextended with a high rate of divorce. He knows these troubles secondhand from a $1.5 million lottery-winning client. "More than once, he said he wished he hadn't won," says Garrison.

"All kinds of things come to the surface," he adds. "Money does not solve all problems."

Cents & insensibility
And what problems to have: Taxes, greedy relatives and friends, expensive decisions, and, possibly worst of all, yourself.

Finding a way to spend millions may seem insurmountable, but it's really not that difficult. Many folks -- lottery winners and insta-rock stars alike -- have succeeded in finding solutions to this particular "problem." And just think, then you'd have to get a job again, and that would be awfully embarrassing.

"Great wealth brought on all of the sudden to somebody unprepared is going to bring trouble," says Paul G. Schervish, director of the Social Welfare Research Institute at Boston College. He lists examples of spiritual trouble to marital trouble to friends, neighbors and charities coming after you.

"Wealth changes the terrain within which you are playing," he continues. "People with swift fortunes are most vulnerable to not knowing what to do with it." The money will be thrust upon you and so will a multitude of requests and decisions. Schervish advises slowing things down. Financial counselors can help a newly minted millionaire take things slowly.

Hartigan explains that good financial and legal advisers can:

  • Provide a buffer to all the requests and wild ideas you'll be hearing for the rest of your life
  • Protect you from yourself by advising you ways to manage the millions
  • Help you turn your new money into even more money
"Understand thoroughly what you want to accomplish," advises Garrison. "It's not just a matter of money management. It's also counseling and helping people deal with all this wealth on psychological and practical matters."

You'll probably want to help out your family and those who were friends before you were rich. You might be interested in leaving a legacy by helping your favorite cause in a major way. Of course, you'd like to secure your own future as a luxury-loving, well-manicured, hundred-dollar-bill-burning type of guy or gal. Financial advisers can inform you and guide you into trust funds, endowments, charitable remainder trusts, family limited partnership and more.

And you'll probably want to have something at the end to leave to your heirs -- 'cause then you get to play all kinds of mind games writing up your will different ways. Unlike us paycheck-to-paycheck schlubs, you'll need to start thinking long term -- looking ahead to your death. It's a grim subject for a new millionaire like you, but an important one. Now's the time to be doing what you can to contain the estate tax that could eat up most of your heirs' inheritance.

"Taxes are important to consider. But don't let the tax tail wag the investment dog," explains Garrison. He says you also want to be aware of your tolerance to risk, your level of knowledge and goals. He recommends a comprehensive approach or "you could have a current planning strategy in conflict with long-term estate planning." Thinking ahead to curtailing future estate tax can also help you curb your present income tax.

Ah, with all your sound planning, you're finally settling into the good life. You've paid off your parents' mortgage. Bought yourself a nice Porsche. Done your tax planning. Established an endowment to save dyslexic whales. Now you are enjoying an expensive facial at an exclusive Caribbean resort.

Erk! Facial? Your bleary eyes open to discover that stinky dog licking pizza sauce off your cheek. The news station has moved on to sports. Your losing lottery ticket is floating in a bowl of melted ice cream. It was all a dream.

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