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Does A Lottery Winner Really Need A Financial Expert?

Topic closed. 31 replies. Last post 4 years ago by Viber.

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Posted: December 18, 2010, 1:03 pm - IP Logged
At first glance, it makes a lot of common sense to hire the services of a financial expert after winning the lottery. At the risk of sounding paranoid, however,  I will suggest that a lottery winner does NOT need the services of the so-called financial experts. By bringing a complete stranger into his newfound wealth, a lottery winner is courting needless danger.  Depending on the deviousness of the so-called financial experts hired, a lottery winner could be courting trouble, even death. By bringing a money-hungry and exploitative "expert" into his new-won millions, a lottery winner is making himself vulnerable to plots and exploitative schemes that could even spell his  own death.
If your brain is not so small as to be peanut-sized, common sense should tell you that you are much SAFER spending your money the way you wish. What am I missing? Why do people often advice that a financial expert should be hired after a player wins the lottery? Is there not more common sense in letting your cash  sit IDLY but SAFELY in your bank account? By hiring the services of a manipulative financial expert, is a lottery winner not running the risk of being duped, and possibly being killed, by the money-hungry experts who would cunningly learn every personal, financial detail about their target, the lottery winner?
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    Posted: December 18, 2010, 1:13 pm - IP Logged

    The real reason MOST winners need them is this- If you are living paycheck to paycheck and you ONLY know how to SPEND money and not SAVE then you are in BIG trouble.  But if you know and understand the value of savings and the need to put money away for the future (401k, IRA, 529 ect) then you should be ok.

      johngreek's avatar - Lottery-023.jpg
      Patras,Achaia,Greece
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      Posted: December 18, 2010, 1:32 pm - IP Logged

      i agree with kapla

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        Posted: December 18, 2010, 2:49 pm - IP Logged

        I've happen to have had some success in the stock market.  Along with capital gains in the market comes taxes.  I hate doing taxes and therefore have an accountant.  I carefully review the documents and tax laws to make sure that what is being submitted is lawful and accurate.  I was forced to hire a tax attorney because I was audited and the IRS claimed I owed several thousand dollars more.  My attorney and accountant cleared things up without any additional funds being paid to the IRS.  Obviously, my attorney didn't work for free but he was worth every penny. 

        I wouldn't need a "financial advisor" if I won because I know exactly how I would invest/spend the money.  I've come to learn that "financial advisors" are really just salespeople. 

        If you win MM/PB your practically GUARANTEED to be audited and you will have to hire an attorney.  Might as well prepare for it so your ready when you get that love letter from the IRS.

          Coin Toss's avatar - shape barbed.jpg
          Zeta Reticuli Star System
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          Posted: December 18, 2010, 3:36 pm - IP Logged

          I also agree with kapla and will add this, the money saved by not hiring a financial planner may wind up being mere chump change compared to the money that could be lost by not hiring one.

          I'm also sure there are financial planners out there who handle accounts that are a lot larger than lottery winners accounts.

          Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

          Lep

          There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

            ttech10's avatar - blobdude
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            Posted: December 18, 2010, 6:29 pm - IP Logged

            I think the only thing a lottery winner really needs is a good accountant as I'm sure the folks at the local H&R Block don't usually deal with people who have millions.

             

            I'd say only those who don't know how to save and only spend are the only ones who should get financial planners, but then I think of Jack Whitaker. Before winning the lottery he was worth something like $15 million and still he used the money unwisely. Aside from how much he spent on his grand-daughter (right?) I read other things like how he spent a lot of money to add another story to his house but then found out it couldn't support it so it was just a waste of money (sure some blame goes to shady builders but with someone looking over his money they would have advised him to get a good contracter to check things out). He also wouldn't have done the other things such as buying people Hummers and big screen TVs.

             

            But even with how not having a financial planner/advisor worked out for a successful person, I don't think it's something every lottery winner needs. There are plenty of winners out there who don't have someone looking after all their money for them. I think if you realize you can't handle the amount of money you have or if you have trouble with people asking you for money, you should hire a planner/advisor that will help you with those issues, because not doing so will put you with a select group of lottery winners you never want to be associated with.

             

            Personally I would just get a good accountant to deal with the taxes, at least for the first 2-3 years, and do all of the other stuff myself. I deal with all my financials now and took a few accounting classes in college (before I decided I wanted my career to be something else) so I think I could handle my financials after winning millions, especially since after those first 2-3 years of getting everything taken care of I would mainly only spend a lot on vacations.

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              Posted: December 18, 2010, 6:41 pm - IP Logged

              I think the only thing a lottery winner really needs is a good accountant as I'm sure the folks at the local H&R Block don't usually deal with people who have millions.

               

              I'd say only those who don't know how to save and only spend are the only ones who should get financial planners, but then I think of Jack Whitaker. Before winning the lottery he was worth something like $15 million and still he used the money unwisely. Aside from how much he spent on his grand-daughter (right?) I read other things like how he spent a lot of money to add another story to his house but then found out it couldn't support it so it was just a waste of money (sure some blame goes to shady builders but with someone looking over his money they would have advised him to get a good contracter to check things out). He also wouldn't have done the other things such as buying people Hummers and big screen TVs.

               

              But even with how not having a financial planner/advisor worked out for a successful person, I don't think it's something every lottery winner needs. There are plenty of winners out there who don't have someone looking after all their money for them. I think if you realize you can't handle the amount of money you have or if you have trouble with people asking you for money, you should hire a planner/advisor that will help you with those issues, because not doing so will put you with a select group of lottery winners you never want to be associated with.

               

              Personally I would just get a good accountant to deal with the taxes, at least for the first 2-3 years, and do all of the other stuff myself. I deal with all my financials now and took a few accounting classes in college (before I decided I wanted my career to be something else) so I think I could handle my financials after winning millions, especially since after those first 2-3 years of getting everything taken care of I would mainly only spend a lot on vacations.

              I thought the IRS always takes its own well BEFORE the lottery money hits the winner's bank account, hu?

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                Posted: December 18, 2010, 6:44 pm - IP Logged

                I thought the IRS acts on Uncle Sam's behalf by taxing and taking away a chunk of the money before the check hits the jackpot winner's bank account? Was I wrong in that assumption?

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                  Posted: December 18, 2010, 8:28 pm - IP Logged

                  I thought the IRS acts on Uncle Sam's behalf by taxing and taking away a chunk of the money before the check hits the jackpot winner's bank account? Was I wrong in that assumption?

                  Most of the state lotteries only withhold 25% for the IRS.  But the top tax bracket is 35% which you would be in with a PB/MM win.  So you'd have to pay an additional 10% when you file.

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                    Posted: December 19, 2010, 5:12 am - IP Logged

                    I thought the IRS always takes its own well BEFORE the lottery money hits the winner's bank account, hu?

                    Yes, but after year one you will need a good accountant.  And I agree with all the comments about needing an accountant.  I also agree that MOST financial planners/brokers/financial advisers are just SALESPEOPLE.  But knowing that going in, you can use that to your advantage.  If you have a strong, specific goal and stick to it you will either walk out with a fair deal or just walk out.  Most of them work on some form of commission/bonus so shopping around you should be able to find a good comfortable person to work with.

                    Or you can just support brother/sister inlaw (family once removed) that works for some bank/stock broker/insurance co. and needs to make a saleLOL (funny how they don't ever call you till you win money?)

                    oh and I love the insurance companies selling their own mutual funds - yea no bias there!! Thumbs Down

                      Fla386's avatar - skull
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                      Posted: December 19, 2010, 8:50 am - IP Logged

                      Not me,no financial advisor here,i can spend it all by myself  

                      .

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                        Monkey Butt, USA
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                        Posted: December 19, 2010, 11:17 am - IP Logged

                        Learn to handle your money........

                        Or your money will handle you..........

                        Remember:

                        You make money..........

                        Money doesn't make you.........

                          Litebets27's avatar - power
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                          Posted: December 19, 2010, 11:43 am - IP Logged

                          Great topic...

                          I believe it all depends on how much time you are willing to dedicate to following your money and the tax laws and know how much you need to save for the future. Research...research...research.

                          I also experienced being audited. After putting in many hours of reading the tax laws and hours of speaking with IRS agents and their advisors, I was able to resolve my problem and get every penny back.

                          After win a large Jackpot, if you drop the money into a safe account and give yourself time to think through exactly what you feel you want out of life and how you feel you can obtain it, you maybe able to work though it all without an advisor.

                          This also depends on how much fear you have when it comes to controlling your own money. And also, how easily you will be tempted to spend it all before being constructive with it.

                          Feeling,  PRICELESS!!!Banana

                          Peace be with you!!

                            Colt45ML's avatar - 4eyes
                            Jawja
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                            Posted: December 19, 2010, 1:43 pm - IP Logged
                            At first glance, it makes a lot of common sense to hire the services of a financial expert after winning the lottery. At the risk of sounding paranoid, however,  I will suggest that a lottery winner does NOT need the services of the so-called financial experts. By bringing a complete stranger into his newfound wealth, a lottery winner is courting needless danger.  Depending on the deviousness of the so-called financial experts hired, a lottery winner could be courting trouble, even death. By bringing a money-hungry and exploitative "expert" into his new-won millions, a lottery winner is making himself vulnerable to plots and exploitative schemes that could even spell his  own death.
                            If your brain is not so small as to be peanut-sized, common sense should tell you that you are much SAFER spending your money the way you wish. What am I missing? Why do people often advice that a financial expert should be hired after a player wins the lottery? Is there not more common sense in letting your cash  sit IDLY but SAFELY in your bank account? By hiring the services of a manipulative financial expert, is a lottery winner not running the risk of being duped, and possibly being killed, by the money-hungry experts who would cunningly learn every personal, financial detail about their target, the lottery winner?

                            Do you think a professional planner or attorney is more likely to try to kill you and take your money than so called friends, relatives, aquaintaces, and just plain people from your past are to get a lawyer and try to sue you at best, and at worst, try to do more criminal acts in order to get their hands on that money?  The number one priority, in my opinion, for a mega millions or powerball jackpot winner is to protect his assets, and the first act of asset protection is to make sure if at all possible that your name is not made public in the claims process.  I see you are from Georgia, and they do make it difficult here to claim annonmusly, but it can be done.  It involves LLCs and irrivocable trusts, and you need good attorneys in this field to do that correctly.  The thing to do is to do due dilligence when you hire attorneys, and also hire about 3 of them so they will all be looking over each others shoulder and rat them out to you if one starts "working for himself" in stead of working for you. Get one that does asset protection to set up the trust and LLC, and a tax lawyer for that aspect.  Also hire a good financial planner.  Give them all access to each of their dealings with you so they will work for you and against each other.

                            I know all this seems complicated, and it is, but winning and claiming 70 mil or ever how much is not even a simple matter, no matter how easy it all seems on the face of it.

                            Be sassy and be happy.

                              ttech10's avatar - blobdude
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                              Posted: December 19, 2010, 3:45 pm - IP Logged

                              I thought the IRS always takes its own well BEFORE the lottery money hits the winner's bank account, hu?

                              This is on the Wikipedia page for the lottery ("Lottery jackpot records" to be exact):

                              The IRS requires at least a 25% withholding of any gambling wins in excess of $5000. However, the take home pay for a large jackpot winner is often misleading. Winners often find themselves in a tax bracket much greater than 25% and have to pay any remaining balance owed to the IRS later when they file their returns.

                               

                              So since every lump sum payment would put you in the 35% tax bracket you would have to pay an additional 10% taxes. If you choose annuity payments then you'll still owe extra taxes, it just wouldn't be as much.

                              In my opinion you would still want an accountant for the first 2-3 years since most people will be gifting money to relatives, purchasing a new home, selling their old home, buying new vehicles, giving to charity and doing other things resulting in large expenditures. Because most people would have never dealt with such stuff before, and because I wouldn't trust an average accountant, I'd suggest going with someone that deals with customers with large amounts of money. After the first few years are over and the big expenses are taken care of then I wouldn't find any problems either doing taxes by yourself or going to a place like H&R Block.