I Won the Lottery! Now What?

O … M .. G … WHAT?!?

You checked the numbers—again. You pass out. Rinse, repeat. And yes, it turns out, the universe finally decided you were due for a win. You’ve officially become one of THOSE people who stuffed a random (or, occasionally, not random) string of numbers onto a small ticket and walked into generational wealth. I cannot fathom what that must feel like. If you’re reading this, there is probably a part of you that feels the same.

First thought? “Holy crap, I just won Powerball!”
Second thought, if you’re healthy, “Oh no … I just won Powerball.”

Ironically, you now stand on a precipice. It should be exciting and terrifying. I wonder if this is what Occam was thinking about when he first mentioned his razor …

Here’s the catch: money doesn’t come with instructions. Money can buy misery as easily as happiness. If you’re not careful, this Cinderella story quickly turns into a reality show trainwreck. The good news, you just need to avoid doing anything really dumb for the next 90 days.

Step 0: Timeframes and Locations

You need to find out how long you have to claim your prize. Can you imagine screwing that up?! You might also have a timeframe on deciding if you’re taking payments or a lump sum. Also, there is no need to visit the liquor store where you bought the ticket. You’ll be visiting the Lottery’s offices in person to claim the prize. Beforehand, you can make an anonymous call to get this basic information.

Step 1: Hide the Ticket Like It’s the Last Donut at the Office

Before you run around screaming or text your cousin who’s always “launching a startup,” sign the back of your ticket, put it in something water tight (a baggie?), and lock it up. No; your glove compartment isn’t a safe place. Get a real safe or, better yet, use a safety deposit box at a bank. Then, breathe. Deeply. 

One more time.

Step 2: Tell -Almost- No One

I know—you want to tell your high school group chat and your dog walker. Who wouldn’t want to share the good news?! Don’t. If your state lets you stay anonymous, do that. Develop a communication plan that excludes your Aunt Cheryl deciding you’re her new retirement plan.

Money will change relationships around you and, likely, not in a good way.

Unfortunately, we’ve seen money destroy every kind of relationship you can imagine. Kids, parents, siblings, spouses, good relationships, strong relationships, etc.

Also, maybe hire a digital privacy team to scrub your info from the internet. You’ll be shocked at how many “long-lost friends” suddenly want to reconnect. You probably won’t be surprised to learn that you’ll have a lot of NEW relationships as well, with  … minor strings attached.

People are going to find you. Non-profits, scam artists, annuity salespeople, relatives with “business plans”, relatives with no plans, etc. You see where this is going? We’ve all seen that internet meme, “I wont tell anyone that I won the lottery, but there will be signs.” Let people infer. People will snear because, “You got lucky.” They’ll assume that you’ve suddenly become too good for them or you’re selfish. You know it isn’t true. While you do suddenly have money, you also suddenly have a LOT of responsibility.

Step 3: Collect The Usual Suspects (Primary: Lawyer + Financial Planner; Secondary: CPA + Bookkeeper + Trustee(?))

Before you even think about claiming your prize, consider hiring a financial advisor and an estate planning/tax attorney. Don’t pick your buddy from college who sells crypto. Find an advisor that deals with sudden wealth. I mean people who’ve actually worked with real money and have more certifications than Instagram followers.

They’ll help you figure out whether to take the lump sum or annual payments (more on that below), get your estate documents in order, and make sure you’re not the next contestant on Who Wants to Stop Being a Millionaire?

Step 4: Lump Sum vs. Annuity—The Eternal Struggle

Quick breakdown:

• Annuity = 20-30 payments over 19-29 years, increasing 5% a year. You get the full advertised jackpot—eventually.
  
  
• Lump Sum = You get about 40–55% of the jackpot now, and you owe taxes immediately. But you control the money (and, yes, the temptation to buy a gold-plated llama … or two).
  
  

Which one’s better? Depends on your self-control and how good your investment team is. If you can earn more than 4% annually, lump sum usually wins. If you’ve already saved consistently in a 401k, amassed some wealth, etc, this may be a reasonable option for you.

However, there is something to taking the payments and learning to deal with this level of money over time. People typically have better long term success when they receive small pieces of responsibility over a couple decades than a dumptruck full of responsibility in three seconds.

If you have big dreams, take the lump sum. Just make sure they won’t become bankruptcy nightmares.

Step 5: Taxes—Because the Government Wants to Party Too

Federal tax withholding is 24%. But wait! The top tax rate is 37%. That means you’ll owe more—probably another 13%—next April. So don’t go buying four Teslas and a private jet just yet.

Pro tip: If you win late in the year, you might be able to defer claiming until January and invest the “owed” taxes in the meantime. This could earn you a couple hundred thousand dollars in interest while the IRS waited patiently.

Work with tax optimization specialists who can help you navigate complex lottery tax scenarios and potentially save hundreds of thousands in tax liability.

Step 6: Now That You’re Rich… Let’s Try to Keep It That Way

Wealth doesn’t come with a manual, but if it did, here’s what it would say:

Chapter 1 - Goals First, Purchases Later

Sure, you’ll buy a nicer car, take some first-class flights, maybe even upgrade your vacation from “resort” to “private yacht.” But once the novelty wears off, you’ll still need a plan. Work with someone who knows what to do with real money and figure out what you actually want your wealth to do.

Chapter 2 - You Still Need a Budget (Sorry)

Even billionaires have spending plans. If you want this money to last longer than a TikTok trend, you’ll need a strategy. That means discipline, investing, and maybe not buying that castle in France immediately. You’re going to want a bookkeeper to make sure that spending is properly accounted. You’ll want them to interface with your CPA and future tax bills. Also, you want to make sure bills are paid on time. Its awkward when your electricity goes out in the middle of a house party.

Chapter 3 - Estate Planning Is Not Optional

There comes a point in every person’s life when they can’t speak for themselves. Maybe they are in a coma. Maybe they are gravely ill. Perhaps they’ve passed away. The government has a default plan if you haven’t devised your own. I wonder whose plan would more closely fit your dreams? Also, If your jackpot pushes you past the estate tax exemption ($13.6M single, $27.2M married), then congrats—you’ve graduated to needing trusts, LLCs, and enough paperwork to destroy a small forest. Welcome to Wealth Class 301.

Estate planning professionals can help you structure trusts, LLCs, and other vehicles to protect your wealth and minimize estate taxes.

Chapter 4 - Charitable Gifting: Do Good, Have Joy, Pay Less in Taxes

Want to reduce your tax bill and help people at the same time? Consider a donor-advised fund or private foundation. It’s like buying yourself a reputation boost with the IRS as your hype man.

Moving Into the Wealthy Mindset

Winning the lottery is like moving to a country where everyone speaks a different language. People will treat you differently. You might quit your job. People will ask for money. You’ll get weird calls. You might hate golf. You might overspend on koi ponds. All of this is normal.

Get a therapist who specializes in wealth. Get advisors who aren’t salesy. Build a trusted team. And for the love of all things financial, do not try to go this alone.

Pace Yourself: “Stuff Is Stress”

Yes, you can buy the jet. But should you? Stuff piles up—literally and emotionally. Big houses mean big staff. Multiple homes mean multiple property tax bills. Don’t build a life so complicated it takes a project manager to book your vacation. There is an argument here for taking annual disbursements; it forces you to build over time and all at once.

Spend to Be Happy (Not Just Impressive)

Money doesn’t buy happiness? Meh. It can—if you spend it wisely. Focus on experiences, relationships, and buying your time back. That’s the good stuff. Not 14 Rolexes and a weird yacht that looks like a Bond villain lair … although …

Final Thought: Winning the Lottery Is Amazing. Wrecking It Is Optional.

Want to make sure your jackpot doesn’t become a punchline?

I help people with sudden wealth make informed decisions while helping them to avoid the financial equivalent of setting their hair on fire. 

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Let’s talk—before your third cousin starts texting you about his “AI-powered crypto derivative hedge fund.”