How to Make the Most of Your Lottery Winnings

Whether you win a big jackpot or just a small prize, the first thing you should do is keep it quiet. After all, a windfall is a dangerous thing to be in the middle of. Even a modest payout can be inundated with vultures, so you need to surround yourself with financial experts who can help you make the most of your money.

That’s why many lottery winners enlist the help of a fiduciary financial planner or estate planning attorney before they formally claim their prize. A financial plan will lay out your short- and long-term goals and help you determine how much tax you’ll owe on the lump sum or annuity payments, says CFP Marianela Collado. A thorough financial plan is even more important if you decide to go the annuity route. In addition to a hefty federal tax rate, you’ll also face state and local taxes and may incur additional inheritance fees from your heirs.

If you choose a lump sum, your financial advisor can help you invest your winnings to earn a higher return than the annuity payout. But no matter which option you choose, the most important decision is how to spend your winnings. “Spread out too much, and you won’t have enough,” says CNBC Make It Your Money host Kevin O’Leary.

New York lawmakers are considering a bill that would let lottery winners stay anonymous by forming a limited liability corporation. But the law won’t pass until next year at the earliest. That doesn’t mean you can’t remain anonymous if you win the lottery—but it’s going to take some work.