Lottery fever has struck!
As players choose their numbers today and tomorrow in 45 states plus Washington, DC and the US Virgin Islands – and dream of their chances of winning – few actually know how they would protect themselves if they won the jackpot.
Financial experts have resources available for lottery hopefuls.
Here are seven tips compiled by lottery commissions, insurance companies, private wealth management companies and others on what lottery winners should do to protect their personal lives and their funds.
1. Beware of scams
Lottery players should watch out for scams, whether they have won the jackpot or not.
Some scammers falsely identify themselves as lottery employees in an attempt to steal money from unsuspecting people, warns Mega Millions.
“No Mega Millions representative would call, text or email anyone to win a prize,” the Multi-Jurisdictional Lottery Commission website states.
Lottery scammers are “persistent”, use real or made up business names and offer a “free play” or “prize” to try to appear legitimate, warns Mega Millions.
Scammers may also ask for personal information or payments that they believe relate to “taxes” or “fees”.
Helpful tips include being suspicious of any lottery winnings from a game that has never been played, as well as being wary of emails containing “spelling mistakes or bad grammar”, according to Mega Millions.
The lottery board also warns people to be suspicious if a contact asks to keep correspondence confidential or asks for banking information.
“No real lottery tells winners to put in their own money in order to collect a prize they’ve already won,” notes Mega Millions.
2. Get professional advice
Lottery winners should assemble a team of financial experts if they have won a big prize, advises Mega Millions.
The lottery board recommends winners check out the resources, financial planning tools and personal experts from the American Institute of Certified Public Accountants, a national professional organization with more than 428,000 CPA affiliates.
Lawyers and financial advisors may also be considered, according to State Farm Insurance.
3. Keep this banknote safe!
Lottery winners should make “several copies” of their winning ticket, according to State Farm. These copies can be shown to lawyers or accountants while the original ticket remains stored in a personal safe or bank vault.
State Farm also warns that lottery winners should read each game’s rules and contract before signing their winning ticket.
“In some cases, signing your ticket can prevent you from creating a blind trust later,” notes the insurance company’s “What to do if you win the lottery” article.
A New York area financial advisor has recommended placing the note in a bank vault until you have completed consultations with your legal and financial advisors.
Also, he said to understand your particular state’s rules about whether or not you can remain anonymous. “It’s very important,” he said.
4. Protect your privacy
Lottery winners should keep their winnings private before handing in a ticket, advises State Farm.
Winners must also be prepared to change their contact details. Indeed, many lotteries share names or require interviews or attendance at press conferences for transparency reasons.
“Be sure to change your phone number and set up a new PO Box ahead of time to avoid being inundated with requests,” State Farm writes.
The insurance company notes that some winners may be able to form a blind trust through their attorney, so that winnings can be received anonymously.
5. Create a plan for the money
While forming a team of financial experts is an important step for most lottery winners, State Farm says winners should make a general list or plan what they want to do with their money.
“Write down your personal, financial, lifestyle, family and charitable goals, and come back to this plan later to help keep things on track for the long term,” says the insurance company.
6. Postpone big decisions
Winning a few million dollars could inspire anyone to make a big purchase or a life change – but the private wealth managers at Cresset Capital advise against that.
“You need to consider how your job contributes to your sense of self and mental well-being,” Cresset Capital says in his article “What to Do (and Not to Do) if You Win the Lottery.”
Instead of choosing early retirement or making another drastic decision, the Chicago-based financial planning firm says lottery winners might consider participating–part-time jobs or higher education, volunteering, or passionate hobbies.
Cresset Capital also cautions lottery winners against “becoming an ATM for family and friends to avoid jeopardizing financial plans early on.
“That’s not to say you should keep all the money for yourself, but take the time to think about how and when you want to give so you don’t hold a grudge or end up being used for your wealth,” writes office.
7. Ask yourself if you should take a lump sum
Some winners agree to receive a lottery lump sum, while others may receive an annuity payment (a series of equal payments spread over a period of time).
Cresset Capital advises winners to seek the advice of a financial advisor to determine which option is best for them.
“Compare after-tax returns, investment returns, your life expectancy, etc. writes Cresset Capital. “Careful planning and thought can result in a higher overall value of your win.”
By the way, the decision on how to withdraw the winnings can change depending on your age, health, family situation and more, said a New York-based financial adviser consulted by Fox News Digital.
All of these things could have an impact on the best decision to make in this regard.
And another bonus tip
If a lottery winner or someone close to a lottery winner has a gambling addiction, Mega Millions says getting help from a gambling addiction association could be a key step.
Two organizations recommended by the lottery board are the National Council on Problem Gambling and Gamblers Anonymous.
The National Council on Problem Gambling has affiliate sites in 34 states, while Gamblers Anonymous has hotlines in every state as well as in-person and virtual meetings.