Big lottery win could easily be followed by big loss
Winning the lottery takes luck — a lot of it. Holding on to the money once you’ve hit it big, though, requires a lot more than luck. Sadly, stories abound of winners who struck it rich only to lose their fortunes later on as a result of big-ticket spending sprees, bad investments, scams, and other poor decisions.
On the day the lucky numbers for the Mega Millions $640 million jackpot were to be drawn, USA Today writer Laura Petrecca interviewed McAfee & Taft tax attorney Richard Craig on what the winners of any lottery or large jackpot should do to protect their unexpected windfalls.
In the article “Big lottery win could easily be followed by big loss,” Craig advises winners to maintain keep quiet and maintain a low profile so as not to open themselves up to a barrage of both legitimate and illegitimate requests for money or make themselves a target for predatory lawsuits. He also recommends creating an “advisory board” consisting of professional advisers and business-savvy friends that can provide valuable guidance and also serve as a buffer against friends and family who ask handouts. The benefit to the winner is that he doesn’t have to shoulder the entire blame for turning down a request from a family member or friend.
While it may be tempting to want to do something with the money immediately — make major investments, donate large amounts to charity, quit a job or buy a big-ticket item — Craig recommends that winners sit tight for six months as they assemble their team of advisers and put their financial infrastructure into place. Once that’s done, he said it’s OK to have fun with some of the money … as long as it’s planned out. “Take some of this, and let it be mad money,” Craig said.
The article and interview with Richard Craig was published by USA Today and picked up by numerous other media outlets across the United States.