Last week, Mavis Wanczyk, a 53-year-old hospital worker in Springfield, Mass. won the $758.7 million Powerball jackpot. She elected to take the cash prize option of $480.5 million and will clear $336 million after taxes.
Not a bad payday.
Unfortunately for Mavis (or “Mave” as she likes to be called), she should have read this article before talking to anyone or doing anything else with that winning ticket (other than sign the back of it and take a picture of it with her phone).
What Mavis probably didn’t understand when she found out that she had won is that nearly 1/3 of all lottery winners will declare bankruptcy. And if that weren’t bad enough, many more lottery winners will lose friends, fall into depression, abuse alcohol and drugs, get divorced, and are more likely to commit suicide.
Not the fairy tale life we all thought winning the lottery would be, is it?
So when you win the lottery, how do you keep this from happening to you? Here are three things you can do to protect yourself.
Here are three things you can do to protect yourself.
1. Keep Your Mouth Shut
This will probably be the hardest thing for anyone to do. It certainly was for Mavis. People like to talk about themselves, and if you just won $758.7 million, your natural inclination is to tell everyone you come into contact with. This could mean your employer, your kids, your parents, your best friends, and even your crazy cousins. But stop yourself right now and DON’T DO IT. Keep your mouth shut.
People like to talk about themselves, and if you just won $758.7 million, your natural inclination is to tell everyone you come into contact with. This could mean your employer, your kids, your parents, your best friends, and even your crazy cousin Eddy.
But stop yourself right now and DON’T DO IT. Keep your mouth shut.
The hero of this story, our beloved superstar Mavis, failed to heed this advice. In time, she will regret her decision to come for so publicly so fast. Almost immediately, she informed her boss and quit her job. As a result, fake social media accounts are being created in her name in an attempt to scam people out of money and the local police are watching over her house.
The lawyer side of me would have advised Mavis to stay anonymous for as long as possible, potentially claiming her winnings without ever telling anyone. Unfortunately, only 5 states allow winners to claim a ticket anonymously and some states actually require a press conference prior to releasing the winnings.
However, if Mavis had just laid low for the time being and followed my next piece of advice, her lawyer could have managed all of these details for her and put together a strategy to assist her through the process of claiming her winnings with as little upheaval to her current life as possible.
2. Hire a Law Firm
Notice I didn’t say to call and hire a “lawyer”. Mavis doesn’t need a lawyer, she will need a team of lawyers – at least in the short term. Her new found wealth is at significant risk and she needs to make sure that she has a legal structure in place to protect her winnings from creditors, taxes, people who might try to take it from her, etc.
Honestly, this should have been the first call Mavis placed. Had Mavis hired a team of lawyers to help her navigate this process, she could have made sure that the proper legal protections and financial accounts were in place when she finally decided to come forward to claim her prize.
3. Don’t Change Your Life
For the first several months, keep your life as normal as possible. Don’t quit your job (as Mavis did). Don’t take any extravagant trips. Don’t buy a new car or house. In a nutshell, don’t do anything significantly different than the way your life is currently.
Winning the lottery is a huge deal. It is life changing. But you need to make sure it changes your life in a positive way, not for the worse.
If you tell lots of people about your new found wealth, if you change the way you live your life drastically, then you are more likely to fall into a downward spiral that will leave you broke and estranged from family and friends.
I have only one exception to this rule – it’s possible you may need to take a week or two to process what just happened in your life. I suspect you will have a hard time thinking about anything else other than your immediate good fortune. If this happens, call off work for a week or two for “personal reasons”. Meet with your lawyers, talk to a financial advisor (recommended by your lawyer), and get all of your legal affairs in order.
Take that time and develop a plan for what comes next in your life, both in the immediate future and long-term.
Final Thoughts on What to Do if You Win the Lottery
If you win the lottery, you are handed a once in a lifetime opportunity to truly change the trajectory of your life. If you are already happy and content with your life, this money won’t change anything.
Here’s the thing about money. Although money can’t buy happiness, it certainly won’t hurt. It gives you freedom and choices. You can do a lot of good in the world if you aren’t stressed about how you will be able to pay the bills next month.
If you are fortunate enough to win the lottery, whether you win a couple hundred thousand dollars, or several hundred million, take some time to digest what just happened and think long and hard about your future before you take any immediate actions.