Categories
BLOG

lottery accountants

Hiring a Lawyer to Manage Lottery Winnings

Why Your First Call After Winning the Lottery Should Be to Hire a Good Lawyer

Image (c) Imagezoo / Getty Images

If you win the lottery, you might think your biggest decision will be what you should buy first. But the truth is, you’ll need help to keep as much of that money as possible to spend down the road. And the first step to getting that help is hiring a lottery lawyer.

What Is a Lottery Lawyer?

Big lottery winners may feel overwhelmed by the number of decisions they have to make before they even claim a jackpot. To make things even more confusing, each state that participates in the lottery has its own procedures for claiming a prize and for minimizing tax liability. That’s why a lawyer’s help really comes in handy.

A lottery lawyer is part of the advisory team that winners should put together to help them wade through the legalities of claiming a prize without making costly mistakes. A good lottery lawyer can protect jackpot winners, their families, and their hard-won cash.

You don’t necessarily need a lawyer who brands themselves as a lottery lawyer, but you do want someone who has experience managing large windfalls. Good lottery lawyers have experience with taxes, estate planning, setting up trusts, and protecting assets.

What Lottery Lawyers Do for Jackpot Winners

If you’ve just won a bundle of cash, you might balk at giving a big chunk of it to a lawyer right off the bat. However, hiring a good lawyer really pays off in the long run. Here are some examples of what lottery lawyers do for jackpot winners:

Protecting Anonymity

When you win the lottery, you want to keep the news as private as possible to avoid being the target of lawsuits, scams, and straight-out begging for cash. But keeping the word from spreading isn’t a simple task. Some states let lottery winners claim their prizes anonymously. Others don’t, but let winners claim in the name of a business, which can reduce the publicity they have to deal with. A good lottery lawyer can help winners protect their anonymity as much as possible.

Another option many lottery winners choose is to set up a trust to claim the prize. In many cases, setting up a trust not only helps protect the winner’s identity, but also prevents the winner from spending too much too quickly while fending off requests for handouts and donations. A lottery lawyer can help determine whether a trust is beneficial for the winner and if so, can help set it up.

Putting Together a Trustworthy Advisory Team

The lottery lawyer isn’t the only important team member that a new jackpot winner needs. An accountant and a financial advisor with experience in helping people deal with large windfalls are also very helpful. A lottery lawyer can help winners pick the other members of their advisory team.

Advising About Payout Options

New lottery winners need to make the decision whether to take a lump sum or an annuity payout. A lottery winner can keep them apprised about the legal and financial ramifications of their choice. Because they know the winner’s exact financial status, they can give better advice than the winner would receive by reading articles online.

Avoiding Common Mistakes

An experienced lottery lawyer knows the pitfalls that inexperienced lottery winners can face. Lawyers can help their clients decide the best time to claim a prize and advise them how to keep their tickets safe until then, avoid overspending, manage their safety, and more. If you don’t want to become a lottery curse victim, a lottery lawyer is a valuable ally who can help you create a strategy to manage your wealth safely.

Quashing Frivolous Lawsuits

Unfortunately, lottery winners can become targets for people who want to scam their way into some of their money. Frivolous lawsuits are one of the ways that unscrupulous people try to worm their way into unearned cash.

A lottery lawyer will not only defend winners from these lawsuits, but they also can anticipate the ways that winners are vulnerable and help them to avoid becoming targets.

How to Hire a Lottery Lawyer

Winners spend a lot of time with their financial team, so it’s important to find someone they trust and feel comfortable with. And of course, the lawyer should be familiar with the unique problems lottery winners face.

It’s not a decision that any winner should make lightly. In 2020, self-branded lottery lawyer Jason Kurland was indicted for defrauding his clients of over $100 million.   You don’t want to trust an unscrupulous person with your winnings.

Some of the things to consider when hiring a lottery lawyer include:

Experience

A good lottery lawyer knows the ins and outs of lottery law and has represented other big winners and people who have received unexpected financial windfalls. They should have proven experience with tax law, trust planning, asset protection, and other financial considerations in your specific statet.

Price

Even jackpot winners need to be careful not to overspend on legal fees. A more expensive lawyer isn’t necessarily a better lawyer, and a good lottery lawyer shouldn’t offer to take a percentage of your winnings. Instead, you should settle on a reasonable hourly fee or retainer. The Laffey Matrix is one way to get ballpark figures for how much it costs to hire a lawyer.

Recommendations

Do some research to find out whether other clients have had good or bad experiences with any lawyers you are considering. If you don’t know anyone who has used them personally, an internet search might reveal compliments or complaints. There are also databases of respected lawyers that you can use, and you can ask any lawyers that you are considering hiring to give you references.

Clean Disciplinary Record

If a lawyer has had disciplinary action taken against him or her, you’ll want to know about it before you hire them. Luckily there are databases that let you check out the lawyers you are considering hiring so that you can look up disciplinary actions by state.

Personality

Don’t overlook your emotional reaction to any lottery lawyer you are considering hiring. You need to be able to trust the lawyer you hire and to feel good about working with them. Sometimes even very good lawyers just don’t mesh with your personality and vice versa, and that’s fine.

Once you know what you are looking for in a lottery lawyer, interview several different candidates to make sure you are finding the proper fit.

If you aren’t sure where to start your hiring process, reach out to your local Bar Association. They can help point you in the right direction.

When Should You Hire a Lottery Lawyer?

If you win a large prize in a lottery, getting a good lawyer should be a priority. You’ll want to have representation before you tell anyone outside of your immediate circle of family and trusted friends that you’ve won, and certainly before you claim your prize.

What's the first thing you should do when you win the lottery? Hire a lawyer! Here's what a lottery lawyer can do for you and how to hire one.

Lottery Financial Advisor: What to do if you Win the Powerball Lottery

Dear Florida Powerball lottery winner, congratulations on your win!

You beat the odds (1 in 175.2 million) and have the distinct honor of being the largest single lottery winner in U.S. history. As someone who has developed a national reputation for working with sudden wealth recipients – or as a client recently remarked a “lottery financial advisor”, I want to share with you a few ideas on how best to handle the rush of emotions of winning — and possibly the anxiety and paralysis over what to do now — with a few best practices I’ve learned over the years of working with clients who come into a windfall.

Here are six things to do before you claim your Powerball winnings:

Sign the winning Powerball ticket

You want to make sure you immediately sign the winning lottery ticket. Lottery tickets are “bearer” instruments. This means that whoever holds the ticket is the winner. I would also suggest you take a photo and video of yourself with the ticket. If something unforeseen happens, these steps go a long way to prove you are the owner of the ticket.

Take care of yourself

This step has nothing to do with your lottery prize and everything to do with you and your health. While everybody handles these things differently, it’s not uncommon to experience anxiety, paranoia, or even strange out-of-body feeling where things move in slow motion as if you were watching your life on a movie screen. For some, these feelings are fleeting, but for others, they can persist and make it hard to sleep, function, and make logical decisions. So, first and foremost is making sure you take care of yourself. Seek professional help if necessary.

Decide if you want a lump-sum or an annuity

The next step – and one that is usually glossed over — is to figure out just exactly how much you’ve won and whether you want a lump sum or an annuity. Although the stated prize is $590 million, it’s a bit misleading. With big lottery wins like yours, you have the option of taking a lump sum payout or to receive the payout over time. If you choose the lump sum option, the amount is $370,896,780.50. If you are a U.S. citizen, the IRS will automatically withhold 25% for taxes – providing you $278,172,585.40. Of course, you’ll be on the hook for more than 25% to the IRS. The real after-tax amount will be closer to $224,000,000.But instead of the lump sum amount, you have the choice of receiving 30 payments of $19,683,000 per year for 29 years. Although a great majority of lottery winners opt to receive a lump sum amount, there are definitely some advantages (and disadvantages) to taking the payout over time. You’ll want your CPA and financial advisor to “run the numbers” for both options and discuss the pros and cons of each. The big advantage of taking the money over time is that it provides you a “do-over” card. We’ve all heard the stories of lottery winners who have lost it all in a few short years. By getting the money over time, even if you are careless the first year, you get 29 more chances to get it right. It’s definitely something to think about sooner rather than later because you have 180 days from the drawing to claim the prize, but if you want the lump sum payout, you only have 60 days from the drawing. Also, the day you claim the prize, you will need to make your decision, so you’ll want to get your team assembled so they can crunch the numbers for you.

Assemble your team

With a lottery win as big as yours, you’ll want to make sure you have a stellar team that can help you make the best decisions. You’ll want an attorney – actually, you’ll undoubtedly use several types of attorneys (business, tax, trusts, and estate), but don’t worry about finding all of these on day one. Find a good attorney to guide you through the initial steps and who can introduce you to others as needed. You will also want a CPA and a financial advisor skilled in managing sudden wealth.

Make a publicity plan after winning the Powerball lottery

Unfortunately in Florida, you don’t have the option of remaining anonymous. As soon as you claim the prize, your little town of Zephyrhills, Florida and the rest of the world will know your name. Journalists and TV reporters will come from far and wide. They will dissect everything you’ve ever done and will want a piece of you. The best approach is to develop a public relations strategy to control the message as much as possible. Figure out what you want to share and what you don’t and decide if you will be your own spokesperson or if you want to have someone else speak on your behalf.

Don’t lose yourself to Powerball lottery winnings

Lottery winners will often complain that after winning their lives are turned upside down and that they are thrust into a new life. It’s hard to keep things exactly as they were when you get a check for over $200 million, but at the same time, you don’t want to lose the aspects of your life you now cherish. Step outside the craziness of the situation for a moment, and make a list of Who and What you love about your life that you don’t want to change. Money is best when you use it to improve your life, not necessarily change it.

Follow these six steps after winning the Powerball lottery to get control of an otherwise seemingly out of control situation. Regardless of what you are feeling now when the lights fade and the cameras go away, things will calm down and you will be able to enjoy your newfound wealth. While you’re here, please read about how we help Powerball lottery winners, sign up for a free email course, or read more related blog posts.

Before you claim the Powerball lottery prize, there are six critical things you must first consider. ]]>