Buzz
Should you win the upcoming Mega Millions lottery, the prize will place you among the wealthiest people on the planet, surpassing $1.25 billion. While it's well-known that winning such a windfall doesn't guarantee lifelong happiness, the temptation to fantasize about your life of luxury is hard to ignore. However, before you dive into plans for mansions and private jets, you'll need a strategy for securing a stable and stress-free future.
To gain insight, we spoke with Dr. Robert Pagliarini, president of Pacifica Wealth Management and author of *The Sudden Wealth Solution: 12 Principles to Transform Sudden Wealth Into Lasting Wealth*. With over two decades of experience advising lottery winners, he has valuable advice on what should top your to-do list should you find yourself unexpectedly wealthy.
Stay composed and safeguard your lottery ticket.
Pagliarini’s first piece of advice for a newly wealthy lottery winner is straightforward: Relax. “You have significant, life-altering decisions to make that require your full mental focus,” he explains. “You don’t want anxiety, excitement, nerves, or fear to cloud your judgment. Remind yourself that you can let loose with excitement later, but for now, you have a responsibility to handle.”
Once you've come to terms with your unimaginable stroke of luck, the next critical step is securing your winning ticket. After all, you didn’t win the lottery—the ticket you purchased did.
Pagliarini explains, “The lottery ticket is a ‘bearer instrument,’ meaning whoever holds it owns it.” This means you need to prove that you are the rightful owner of the ticket. How? Take a selfie with the ticket. Record a video. Keep it safe!” It’s also commonly recommended that you sign the back of the ticket to further confirm your ownership.
Understand what your actual winnings will be
Pagliarini notes that a common mistake for lottery winners is thinking they’ve won more than they actually have. “If you win a $100 million jackpot, you (and your friends and family) might assume you have $100 million. But you don’t. If you opt for the lump sum, you’ll receive about 60% of the jackpot, which reduces your total to $60 million. Then you’ll need to account for federal and, often, state taxes, which can slash your prize in half.” To put things in perspective, even with a $1.25 billion jackpot, the payout would be roughly $492.9 million after taxes, if you choose the lump sum option.
Pagliarini advises lottery winners to approach their newfound wealth with caution. Because they haven’t worked for the money, they’re often more inclined to spend it carelessly. He describes it as feeling like Monopoly money, leading them to make more impulsive purchases, give it away generously, or invest in risky ventures. Some individuals who have won massive lottery prizes have even ended up bankrupt.
Keep your victory quiet—and secure legal help.
One of the first pieces of advice Pagliarini offers lottery winners is to keep the news of their win a secret for as long as possible. He suggests sharing the information with only one close family member and keeping it under wraps from everyone else. The more people who know about your windfall, the sooner you’ll have to deal with those seeking a portion of it. And as mentioned before, others’ assumptions about the amount of money you’ve actually won are likely to be exaggerated.
After having one of the most surreal and exciting conversations of your life with a trusted loved one, Pagliarini recommends hiring a lawyer. He emphasizes the importance of having someone who prioritizes your best interests and can guide you through the legal processes. A lawyer will assist in claiming your winnings (and let you know if your state allows you to remain anonymous), as well as help lay the foundation for safeguarding your new wealth.
