This Friday, the Mega Millions lottery jackpot is expected to eclipse one billion dollars. And while it’s well documented that winning the lottery isn’t going to translate into a lifetime of eternal happiness, it’s impossible not to daydream about what you’d do with such a life-changing windfall. But before you get carried away thinking about the jet skis you’ll buy and the coworkers you’ll tell off, consider having a plan to best set yourself up for a stress-free life of financial freedom. But how?
To find out, I spoke with the president and chief financial advisor of Pacifica Wealth Management and author of The Sudden Wealth Solution, Dr. Robert Pagliarini, who has twenty-four years of experience advising lottery winners, to find out what one should do the moment they’ve won the jackpot.
Keep calm and protect the lottery ticket
The first piece of advice Pagliarini gave for a prospective lottery winner is simple: Just breathe. “You have some life-changing decisions to make that require your full mental abilities,” he says. “You don’t want anxiety, excitement, nerves, or fear to cloud good judgment. Tell yourself that you can go crazy with excitement later, but for now, you’ve got a job to do.”
Once you’ve wrapped your head around your nearly impossible stroke of good fortune, the next most important step to take is to ensure the safe-keeping of your winning ticket. After all, you didn’t win the lottery—the ticket you bought did.
“The lottery ticket is a ‘bearer instrument,’ which means whoever has it owns it,” Pagliarini says. “This means you have to document that YOU are the rightful owner of the ticket. How? Take a selfie of you and your ticket. Take a video. Keep it safe!” It’s also frequently suggested you add your signature to the back of the ticket, to further demonstrate your ownership.
Understand what your winnings will look like
According to Pagliarini, the one of the most common pitfalls lottery winners face is they think they’re coming into more money than they actually are. “If you win a $100 million jackpot, you (and your family and friends) might think you have $100 million. You don’t. If you take the lump-sum, you get about 60% of the jackpot. So that drops you to $60 million. But then you have federal and (often) state income taxes. That cuts your win in half.”
Additionally, he cautions lottery winners to have the right mindset with their lottery winnings. Since lottery winners didn’t earn the money, he’s seen them be susceptible to spending it more freely. “It feels like Monopoly money,” he says. “You are likely to spend it more freely, give it more freely, and invest it in much more risky investments.”
Stay quiet about your win—and lawyer up
Among the advice Pagliarini gives lottery winners within the first twenty-four hours after winning is keeping the bombshell news extremely close to the vest. “Only tell one family member,” he says. “Keep it a secret to everyone else at this point.” After all, the sooner people know about your winnings, the sooner you’ll be fielding correspondence from those hoping to get a piece of the pie. And as previously discussed, their idea of how much money you’ve truly come into will most likely be inflated.
After having presumably one of the most fun and out-of-body conversations of your life with your chosen loved one, Pagliarini suggests securing a lawyer. “Hire an attorney,” he says. “You want someone on your team to help you and who has your best interests in mind.” A lawyer will be able to help you with claiming the winnings (and will advise you on whether your state will let you do so anonymously), as well as laying the groundwork for protecting your newfound bounty.