Winning lotto or getting a sudden financial windfall

Winning big with Lotto is something many dream about, but few experience. And despite the ‘dreaming’, those who do win are often not prepared for managing the burden that comes with being a large winner. It may seem counterintuitive to think there is a burden, when you are now sitting on a large windfall that could possibly set you up for life. 

But it can be stressful; winners have not usually come from a strong financial position, so aren’t used to handling large sums of money. They are often burdened with a sense of guilt; it’s wonderful to know you have this money at your disposal, but are you able to change your lifestyle without drawing attention to yourself. Equally, you may want to help those closest to you, but you do not want to set the wrong expectation for the future, to the extent anyone you give some money to may think you can now bank roll them.

For those who win lotto or end up with a windfall such as an unexpected inheritance, here are some suggestions to help make this a positive experience,

1. Keep the information of your windfall tight within your family,
2. Don’t change too much in terms of your spending habits.  Shop at the same places, buy the same things.  Don’t change your financial rhythm too much,
3. If you have debt, repay it,
4. Grant yourself a decision free 12 months. Let your new reality sink in and use this time to think about the things you really want for your long term future,
5. Lock the money away.  There will be endless suggestions about what to do with it.  Leave those to one side and seek advice from professionals you can relate to and who you trust.  Use a lawyer and accountant and a financial adviser that you can easily relate to and who you can trust.
6. Finally, when you have organised your thoughts around your new reality, it’s time to plan.  Your plan is yours.  It’s your life and now you have resources to change how that is going to be.  Make good long terms decisions consistent with your aspirations and your values.

At the core of any actions you take, make sure you have the structure and support in place to protect your windfall. This is not a time for regrets. To do this, it is best to get a team of professionals who are discrete and can work together to deliver for you the right legal, tax and investment structure. 

Of course, not all windfalls come from Lotto winnings. We work with client’s who have been the beneficiary of trust distribution or an unexpected inheritance. The same approach applies; to seek professional help, pay down debt, but not to rush into making any large purchases or distributions without considering the impacts on your future.