Lottery Winner Advice – What to Do After Winning the Lottery

If you win the lottery, your life could change in a snap. But before you rush off to the store to buy a new wardrobe or throw an enormous party, take the time to carefully consider what to do next. This is especially important if you want to make sure you don’t make any big mistakes that could cost you your winnings.

Lottery winners are not known for their ability to manage large sums of money, and many have gone broke shortly after winning. Curtis Sharp, who won $5 million in a New York lottery drawing in 1982, went from rags to riches to a life of misery. He spent his money on cars, parties, and a massive entourage of hangers-on before hanging himself seven years later.

The key to a successful outcome is careful planning and assembling a team of experts, including an accountant, attorney and financial advisor, to help you with your decisions. It’s also a good idea to consider the tax consequences of your prize. You may be able to give some of your money away without paying any gift taxes, but you’ll likely have to pay a hefty capital gains tax on any amounts that exceed $11.4 million.

You should also decide whether to take a lump sum or annuity payment for your jackpot. The annuity option spreads your payout over 29 years, which means you’ll receive 30 annual payments. But this option could significantly lower your initial payout.