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Posted: 2/7/2009 6:12:08 PM EDT
Well, with the economy in tatters it is unsurprising that we might see a sudden increase in lottery posts in the General forum.  That is usually the signal that it is once again time for me to cull through the archives and repost my guide for recent lottery winners (or hopefuls).

So, without further ado, here it is:



Congratulations!  You just won millions of dollars in the lottery!  That's great.

Now you're fucked.

No really.

You are.

You're fucked.

I've seen this question (what to do if you win the lottery), a few times on ARFCOM.  Amusingly, it recurs quite often.  I posted a similar article to this one "back when" but I've updated it with some actual stories and slapped it in GD because, well, why not?

Keep in mind: IAALBNY (I Am A Lawyer But Not Yours).  Consult professional advisers before spending your hard earned lottery cash.

It's long.  There are no cliff notes.  But if you just want to skip the tales of woe of some of the math-tax protagonists, skip on down to the line in bold.

You see, it's something of an open secret that winners of obnoxiously large jackpots tend to end up badly with alarming regularity.  Not the $1 million dollar winners.  But anyone in the nine-figure range is at high risk.  Eight-figures?  Pretty likely to be screwed.  Seven-figures?  Yep.  Painful.  Perhaps this is a consequence of the sample.  The demographics of lottery players might be exactly the wrong people to win large sums of money.  Or perhaps money is the root of all evil.  Either way, you are going to have to be careful.  Don't believe me?  Consider this:

Large jackpot winners face double digit multiples of probability versus the general population to be the victim of:

Homicide (something like 20x more likely)
Drug overdose
Bankruptcy (how's that for irony?)
Kidnapping

And triple digit multiples of probability versus the general population rate to be:

Convicted of drunk driving
The victim of Homicide (at the hands of a family member) 120x more likely in this case, ain't love grand?
A defendant in a civil lawsuit
A defendant in felony criminal proceedings

Believe it or not, your biggest enemy if you suddenly become possessed of large sums of money is... you.  At least you will have the consolation of meeting your fate by your own hand.  But if you can't manage it on your own, don't worry.  There are any number of willing participants ready to help you start your vicious downward spiral for you. Mind you, many of these will be "friends," "friendly neighbors," or "family." Often, they won't even have evil intentions. But, as I'm sure you know, that makes little difference in the end. Most aren't evil.  Most aren't malicious.  Some are.  None are good for you.

Jack Whittaker, a Johnny Cash attired, West Virginia native, is the poster boy for the dangers of a lump sum award.  In 2002 Mr. Whittaker (55 years old at the time) won what was, also at the time, the largest single award jackpot in U.S. history.  $315 million.  At the time, he planned to live as if nothing had changed, or so he said.  He was remarkably modest and decent before the jackpot, and his ship sure came in, right?  Wrong.

Mr. Whittaker became the subject of a number of personal challenges, escalating into personal tragedies, complicated by a number of legal troubles.

Whittaker wasn't a typical lottery winner either.  His net worth at the time of his winnings was in excess of $15 million, owing to his ownership of a successful contracting firm in West Virginia.  His claim to want to live "as if nothing had changed" actually seemed plausible.  He should have been well equipped for wealth.  He was already quite wealthy, after all.  By all accounts he was somewhat modest, low profile, generous and good natured.  He should have coasted off into the sunset.  Yeah.  Not exactly.

Whittaker took the all-cash option, $170 million, instead of the annuity option, and took possession of $114 million in cash after $56 million in taxes.  After that, things went south.

Whittaker quickly became the subject of a number of financial stalkers, who would lurk at his regular breakfast hideout and accost him with suggestions for how to spend his money.  They were unemployed.  No, an interview tomorrow morning wasn't good enough.  They needed cash NOW.  Perhaps they had a sure-fire business plan.  Their daughter had cancer.  A niece needed dialysis.  Needless to say, Whittaker stopped going to his breakfast haunt.  Eventually, they began ringing his doorbell.  Sometimes in the early morning.  Before long he was paying off-duty deputies to protect his family.  He was accused of being heartless.  Cold.  Stingy.

Letters poured in.  Children with cancer.  Diabetes.  MS.  You name it.  He hired three people to sort the mail.  A detective to filter out the false claims and the con men (and women) was retained.

Brenda, the clerk who had sold Whittaker the ticket, was a victim of collateral damage.  Whittaker had written her a check for $44,000 and bought her house, but she was by no means a millionaire.  Rumors that the state routinely paid the clerk who had sold the ticket 10% of the jackpot winnings hounded her.  She was followed home from work.  Threatened.  Assaulted.

Whittaker's car was twice broken into, by trusted acquaintances who watched him leave large amounts of cash in it.  $500,000 and $200,000 were stolen in two separate instances.  The thieves attempted to spike Whittaker's drink with prescription drugs in the first instance.  Whittaker was violently allergic to the drug used, and likely would have died given the distance to the nearest emergency room, and the lateness of the hour, but, fortunately he did not consume the drink containing the narcotics.  The second incident was the handiwork of his granddaughter's friends, who had been probing the girl for details on Whittaker's cash for weeks.

Even Whittaker's good-faith generosity was questioned.  When he offered $10,000 to improve the city's water park so that it was more handicap accessible, locals complained that he spent more money at the strip club.  (Amusingly this was true).

Whittaker invested quite a bit in his own businesses, tripled the number of people his businesses employed (making him one of the larger employers in the area) and eventually had given away $14 million to charity through a foundation he set up for the purpose.  This is, of course, what you are "supposed" to do.  Set up a foundation.  Be careful about your charity giving.  It made no difference in the end.

To top it all off, Whittaker had been accused of ruining a number of marriages.  His money made other men look inferior, they said, wherever he went in the small West Virginia town he called home.  Resentment grew quickly.  And festered.  Whittaker paid four settlements related to this sort of claim.  Yes, you read that right.  Four.

His family and their immediate circle were quickly the victims of odds-defying numbers of overdoses, emergency room visits and even fatalities.  His granddaughter, the eighteen year old "Brandi" (who Whittaker had been giving a $2100.00 per week allowance) was found dead after having been missing for several weeks.  Her death was, apparently, from a drug overdose, but Whittaker suspected foul play.  Her body had been wrapped in a tarp and hidden behind a rusted-out van.  Her seventeen year old boyfriend had expired three months earlier in Whittaker's vacation house, also from an overdose.  Some of his friends had robbed the house after his overdose, stepping over his body to make their escape and then returning for more before stepping over his body again to leave. His parents sued for wrongful death claiming that Whittaker's loose purse strings contributed to their son's death.  Amazingly, juries are prone to award damages in cases such as these.  Whittaker settled.  Again.

Even before the deaths, the local and state police had taken a special interest in Whittaker after his new-found fame.  He was arrested for minor and less minor offenses many times after his winnings, despite having had a nearly spotless record before the award.  Whittaker's high profile couldn't have helped him much in this regard.

In 18 months Whittaker had been cited for over 250 violations ranging from broken tail lights on every one of his five new cars, to improper display of renewal stickers.  A lawsuit charging various police organizations with harassment went nowhere and Whittaker was hit with court costs instead.

Whittaker's wife filed for divorce, and in the process froze a number of his assets and the accounts of his operating companies.  Caesars in Atlantic City sued him for $1.5 million to cover bounced checks, caused by the asset freeze.

Today Whittaker is badly in debt, and bankruptcy looms large in his future.

But, hey,  that's just one example, right?

Wrong.

Nearly one third of multi-million dollar jackpot winners eventually declare bankruptcy.  Some end up worse.  To give you just a taste of the possibilities, consider the fates of:

Billie Bob Harrell, Jr.: $31 million.  Texas, 1997.  As of 1999: Committed suicide in the wake of incessant requests for money from friends and family.  “Winning the lottery is the worst thing that ever happened to me.”

William “Bud” Post: $16.2 million. Pennsylvania. 1988. In 1989: Brother hires a contract murderer to kill him and his sixth wife. Landlady sued for portion of the jackpot. Convicted of assault for firing a gun at a debt collector. Declared bankruptcy.  Dead in 2006.

Evelyn Adams: $5.4 million (won TWICE 1985, 1986). As of 2001: Poor and living in a trailer gave away and gambled most of her fortune.

Suzanne Mullins: $4.2 million. Virginia. 1993. As of 2004: No assets left.

Shefik Tallmadge: $6.7 million. Arizona. 1988. As of 2005: Declared bankruptcy.

Thomas Strong: $3 million. Texas. 1993. As of 2006: Died in a shoot-out with police.

Victoria Zell: $11 million. 2001. Minnesota.  As of 2006: Broke.  Serving seven year sentence for vehicular manslaughter.

Karen Cohen: $1 million. Illinois. 1984.  As of 2000: Filed for bankruptcy.  As of 2006: Sentenced to 22 months for lying to federal bankruptcy court.

Jeffrey Dampier: $20 million. Illinois. 1996. As of 2006: Kidnapped and murdered by own sister-in-law.

Ed Gildein: $8.8 million. Texas. 1993.  As of 2003:  Dead.  Wife saddled with his debts.  As of 2005: Wife sued by her own daughter who claimed that she was taking money from a trust fund and squandering cash in Las Vegas.

Willie Hurt: $3.1 million. Michigan. 1989.  As of 1991: Addicted to cocaine.  Divorced.  Broke.  Indicted for murder.

Michael Klingebiel: $2 million.  As of 1998 sued by own mother claiming he failed to share the jackpot with her.

Janite Lee: $18 million. 1993. Missouri.  As of 2001: Filed for bankruptcy with $700 in assets.

Mack Metcalf: $65 million. Kentucky. 2000.  As of 2001: Divorced.  As of 2002: Sued girlfriend for $500,000 claiming he was drunk when he gave it to her.  Sued by wife for child support.  As of 2003: Died of alcoholism.  As of a few months later in 2003: Second wife bought a mansion with the money, collected dozens of stray cats and died of a drug overdose immediately after moving in.

I could go on quite a bit.

So, what the hell DO you do if you are unlucky enough to win the lottery?

This is the absolutely most important thing you can do right away:  NOTHING.

Yes.  Nothing.

DO NOT DECLARE YOURSELF THE WINNER yet.

Do NOT tell anyone. The urge is going to be nearly irresistible. Resist it. Trust me.

1. IMMEDIATELY retain an attorney. Get a partner from a larger, NATIONAL firm. Don't let them pawn off junior partners or associates on you. They might try, all law firms might, but insist instead that your lead be a partner who has been with the firm for awhile. Do NOT use your local attorney. Yes, I mean your long-standing family attorney who did your mother's will. Do not use the guy who fought your dry-cleaner bill. Do not use the guy you have trusted your entire life because of his long and faithful service to your family. In fact, do not use any firm that has any connection to family or friends or community. TRUST me. This is bad. You want someone who has never heard of you, any of your friends, or any member of your family. Go the the closest big city and walk into one of the national firms asking for one of the "Trust and Estates" partners you have previously looked up on http://www.martindale.com from one of the largest 50 firms in the United States which has an office near you. You can look up attorneys by practice area and firm on Martindale. The top 50 firms by size are:

Baker & McKenzie
DLA Piper Rudnick Gray Cary
Jones Day
White & Case
Latham & Watkins
Skadden, Arps, Slate, Meagher & Flom
Sidley Austin Brown & Wood
Greenberg Traurig
Mayer Brown, Rowe & Maw
Morgan, Lewis & Bockius
Holland & Knight
Wilmer Cutler Pickering Hale and Dorr
Weil, Gotshal & Manges
Kirkland & Ellis
Morrison & Foerster
McDermott, Will & Emery
Shearman & Sterling
Hogan & Hartson
Kirkpatrick & Lockhart Nicholson Graham
Reed Smith
O’Melveny & Myers
Akin Gump Strauss Hauer & Feld
Paul, Hastings, Janofsky & Walker
Foley & Lardner
Fulbright & Jaworski
Cleary Gottlieb Steen & Hamilton
Pillsbury Winthrop Shaw Pittman
Dechert
King & Spalding
Bingham McCutchen
Wilson, Elser Moskowitz, Edelman & Dicker
Winston & Strawn
Squire, Sanders & Dempsey
Hunton & Williams
Gibson, Dunn & Crutcher
Orrick, Herrington & Sutcliffe
Bryan Cave
Vinson & Elkins
Ropes & Gray
Proskauer Rose
Heller Ehrman
Alston & Bird
McGuireWoods
Simpson Thacher & Bartlett
Baker Botts
Sonnenschein Nath & Rosenthal
Debevoise & Plimpton
Nixon Peabody
Paul, Weiss, Rifkind, Wharton & Garrison
LeBoeuf, Lamb, Greene & MacRae

2. Decide to take the lump sum. Most lotteries pay a really pathetic rate for the annuity. It usually hovers around 4.5% annual return or less, depending. It doesn't take much to do better than this, and if you have the money already in cash, rather than leaving it in the hands of the state, you can pull from the capital whenever you like. If you take the annuity you won't have access to that cash.  That could be good.  It could be bad.  It's probably bad unless you have a very addictive personality.  If you need an allowance managed by the state, it is because you didn't listen to point #1 above.

Why not let the state just handle it for you and give you your allowance?

Many state lotteries pay you your "allowance" (the annuity option) by buying U.S. treasury instruments and running the interest payments through their bureaucracy before sending it to you along with a hunk of the principal every month.  You will not be beating inflation by much, if at all. There is no reason you couldn't do this yourself, if a low single-digit return is acceptable to you.

You aren't going to get even remotely the amount of the actual jackpot.  Take our old friend Mr. Whittaker.  Using Whittaker is a good model both because of the reminder of his ignominious decline, and the fact that his winning ticket was one of the larger ones on record.  If his situation looks less than stellar to you, you might have a better perspective on how "large" your winnings aren't.  Whittaker's "jackpot" was $315 million.  He selected the lump-sum cash up-front option, which knocked off $145 million (or 46% of the total) leaving him with $170 million.  That was then subject to withholding for taxes of $56 million (33%) leaving him with $114 million.

In general, you should expect to get about half of the original jackpot if you elect a lump sum (maybe better, it depends). After that, you should expect to lose around 33% of your already pruned figure to state and federal taxes.  (Your mileage may vary, particularly if you live in a state with aggressive taxation schemes).

3. Decide right now, how much you plan to give to family and friends. This really shouldn't be more than 20% or so. Figure it out right now. Pick your number. Tell your lawyer. That's it. Don't change it. 20% of $114 million is $22.8 million. That leaves you with $91.2 million.  DO NOT CONSULT WITH FAMILY when deciding how much to give to family.  You are going to get advice that is badly tainted by conflict of interest, and if other family members find out that Aunt Flo was consulted and they weren't you will never hear the end of it. Neither will Aunt Flo.  This might later form the basis for an allegation that Aunt Flo unduly influenced you and a lawsuit might magically appear on this basis.  No, I'm not kidding.  I know of one circumstance (related to a business windfall, not a lottery) where the plaintiffs WON this case.

Do NOT give anyone cash. Ever. Period. Just don't. Do not buy them houses. Do not buy them cars. Tell your attorney that you want to provide for your family, and that you want to set up a series of trusts for them that will total 20% of your after tax winnings. Tell him you want the trust empowered to fund higher education, some help (not a total) purchase of their first home, some provision for weddings and the like, whatever. Do NOT put yourself in the position of handing out cash. Once you do, if you stop, you will be accused of being a heartless bastard (or bitch). Trust me. It won't go well.

It will be easy to lose perspective.  It is now the duty of your friends, family, relatives, hangers-on and their inner circle to skew your perspective, and they take this job quite seriously. Setting up a trust, a managed fund for your family that is in the double digit millions is AMAZINGLY generous. You need never have trouble sleeping because you didn't lend Uncle Jerry $20,000 in small denomination unmarked bills to start his chain of deep-fried peanut butter pancake restaurants. ("Deep'n 'nutter Restaurants") Your attorney will have a number of good ideas how to parse this wealth out without turning your siblings/spouse/children/grandchildren/cousins/waitresses into the latest Paris Hilton.

4. You will be encouraged to hire an investment manager. Considerable pressure will be applied.  Don't.

Investment managers charge fees, usually a percentage of assets. Consider this: If they charge 1% (which is low, I doubt you could find this deal, actually) they have to beat the market by 1% every year just to break even with a general market index fund. It is not worth it, and you don't need the extra return or the extra risk. Go for the index fund instead if you must invest in stocks. This is a hard rule to follow.  They will come recommended by friends.  They will come recommended by family.  They will be your second cousin on your mother's side.  Investment managers will sound smart. They will have lots of cool acronyms. They will have nice PowerPoint presentations. They might (MIGHT) pay for your shrimp cocktail lunch at TGI Friday's while reminding you how poor their side of the family is.  They live for this stuff.

You should smile, thank them for their time, and then tell them you will get back to them next week. Don't sign ANYTHING. Don't write it on a cocktail napkin (lottery lawsuit cases have been won and lost over drunkenly scrawled cocktail napkin addition and subtraction figures with lots of zeros on them).  Never call them back. Trust me. You will thank me later.  This tactic, smiling, thanking people for their time, and promising to get back to people, is going to have to become familiar.  You will have to learn to say no gently, without saying the word "no."  It sounds underhanded.  Sneaky.  It is.  And its part of your new survival strategy.  I mean the word "survival" quite literally.

Get all this figured out BEFORE you claim your winnings. They aren't going anywhere. Just relax.

5. If you elect to be more global about your paranoia, use between 20.00% and 33.00% of what you have not decided to commit to a family fund IMMEDIATELY to purchase a combination of longer term U.S. treasuries (5 or 10 year are a good idea) and perhaps even another G7 treasury instrument. This is your safety net. You will be protected... from yourself.

You are going to be really tempted to starting being a big investor. You are going to be convinced that you can double your money in Vegas with your awesome Roulette system/by funding your friend's amazing idea to sell Lemming dung/buying land for oil drilling/by shorting the North Pole Ice market (global warming, you know). This all sounds tempting because "Even if I lose it all I still have $XX million left!  Anyone could live on that comfortably for the rest of their life."  Yeah, except for 33% of everyone who won the lottery.

You're not going to double your money, so cool it. Let me say that again. You're not going to double your money, so cool it.  Right now, you'll get around 3.5% on the 10 year U.S. treasury. With $18.2 million (20% of $91.2 mil after your absurdly generous family gift) invested in those you will pull down $638,400 per year. If everything else blows up, you still have that, and you will be in the top 1% of income in the United States. So how about you not fuck with it. Eh? And that's income that is damn safe. If we get to the point where the United States defaults on those instruments, we are in far worse shape than worrying about money.

If you are really paranoid, you might consider picking another G7 or otherwise mainstream country other than the U.S. according to where you want to live if the United States dissolves into anarchy or Britney Spears is elected to the United States Senate. Put some fraction in something like Swiss Government Bonds at 3%. If the Swiss stop paying on their government debt, well, then you know money really means nothing anywhere on the globe anymore.  I'd study small field sustainable agriculture if you think this is a possibility.  You might have to start feedng yourself.

6. That leaves, say, 80% of $91.2 million or $72.9 million. Here is where things start to get less clear. Personally, I think you should dump half of this, or $36.4 million, into a boring S&P 500 index fund. Find something with low fees. You are going to be constantly tempted to retain "sophisticated" advisers who charge "nominal fees." Don't. Period. Even if you lose every other dime, you have $638,400 per year you didn't have before that will keep coming in until the United States falls into chaos. Fuck advisers and their fees. Instead, drop your $36.4 million in the market in a low fee vehicle. Unless we have an unprecedented downturn the likes of which the United States has never seen, should return around 7.00% or so over the next 10 years. You should expect to touch not even a dime of this money for 10 or 15 or even 20 years. In 20 years $36.4 million could easily become $115 million.

7. So you have put a safety net in place. You have provided for your family beyond your wildest dreams. And you still have $36.4 million in "cash." You know you will be getting $638,400 per year unless the capital building is burning, you don't ever need to give anyone you care about cash, since they are provided for generously and responsibly (and can't blow it in Vegas) and you have a HUGE nest egg that is growing at market rates. (Given the recent dip, you'll be buying in at great prices for the market). What now? Whatever you want. Go ahead and burn through $36.4 million in hookers and blow if you want. You've got more security than 99% of the country. A lot of it is in trusts so even if you are sued your family will live well, and progress across generations. If your lawyer is worth his salt (I bet he is) then you will be insulated from most lawsuits anyhow. Buy a nice house or two, make sure they aren't stupid investments though. Go ahead and be an angel investor and fund some startups, but REFUSE to do it for anyone you know. (Friends and money, oil and water - Michael Corleone) Play. Have fun. You earned it by putting together the shoe sizes of your whole family on one ticket and winning the jackpot.

You 'da Man (Woman).
Link Posted: 2/7/2009 6:32:16 PM EDT
[#1]
And don't fly to Australia
Link Posted: 2/7/2009 6:33:17 PM EDT
[#2]
I remember you posting this before.  Great thread.
Link Posted: 2/7/2009 6:33:18 PM EDT
[#3]
Now where's the guide on picking the winning numbers?  

My biggest question is, if I'm lucky enough to have something like this happen to me, what's the most effective means to keep Uncle Barry's mitts off of the huge lump sum?
Link Posted: 2/7/2009 6:36:51 PM EDT
[#4]
Quoted:
And don't fly to Australia



Link Posted: 2/7/2009 6:37:10 PM EDT
[#5]
ok, say the bingo jackpot is really really big and you won... do you holler "BINGO" or do you lunge for the cellphone and furiously speed-dial your attorney?




ETA: Kangaroo on walkabout in Austria

Police in Austria were pressed into action to help capture a kangaroo that went walkabout after jumping out of its enclosure near the town of St Veit.
But Austrian police training does not cover kangaroo catching, and the animal spent some time exploring the snowy countryside before being apprehended.

Local police officer Joerg Fortin said the wayward marsupial just kept hopping away when they tried get hold of it.

In the end a local vet was called in to help catch it using a stun gun....


Link Posted: 2/7/2009 6:41:52 PM EDT
[#6]
Quoted:
ok, say the bingo jackpot is really really big and you won... do you holler "BINGO" or do you lunge for the cellphone and furiously speed-dial your attorney?




ETA: Kangaroo on walkabout in Austria

Police in Austria were pressed into action to help capture a kangaroo that went walkabout after jumping out of its enclosure near the town of St Veit.
But Austrian police training does not cover kangaroo catching, and the animal spent some time exploring the snowy countryside before being apprehended.

Local police officer Joerg Fortin said the wayward marsupial just kept hopping away when they tried get hold of it.

In the end a local vet was called in to help catch it using a stun gun....




This is going to really make my life complicated.
Link Posted: 2/7/2009 6:55:18 PM EDT
[#7]
I hope you don't mind Austrian, but the last time you posted this I copied, pasted and saved it.

Though I can't remember the last time I  bought a Lotto ticket, I may again one day purchase one. And since I have plans for zombies, Russian Invasion, EMP attack, Yellowstone explosion and alien invasions; a plan for winning the Lotto only seems reasonable.


Though my real hope is to become fantastically wealthy from hard work and determination.
Link Posted: 2/7/2009 6:58:43 PM EDT
[#8]
This is probably my favorite post ever on ARFCOM.
Link Posted: 2/7/2009 7:50:32 PM EDT
[#9]
I love reading it every time I see it.



It's good to be broke.  

Link Posted: 2/9/2009 3:32:22 PM EDT
[#10]
Thanks.
Link Posted: 2/9/2009 3:41:21 PM EDT
[#11]
Another Austrian great!




Link Posted: 2/9/2009 3:52:47 PM EDT
[#12]
cept for #6 where it says "unless there is a downturn unlike we have ever seen..."


hmmm...sounds familiar somehow...I just cant place it...
Link Posted: 2/9/2009 5:50:04 PM EDT
[#13]
Quoted:
cept for #6 where it says "unless there is a downturn unlike we have ever seen..."


hmmm...sounds familiar somehow...I just cant place it...


Luckily, you had a large block of your money in Treasuries (which are currently in a bubble) if you took my advice.  :)
Link Posted: 2/9/2009 6:35:44 PM EDT
[#14]
Great post.



Winning a huge amount would damn sure change my life. Solicitors would have to come find me in my newly acquired missile silo, not at the local diner.




Link Posted: 3/30/2009 4:55:50 PM EDT
[#15]
How pro athletes go broke:

http://vault.sportsillustrated.cnn.com/vault/article/magazine/MAG1153364/1/index.htm



* By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.

• Within five years of retirement, an estimated 60% of former NBA players are broke.
...

For the risk-averse investor, an adviser such as Butowsky would suggest allocating 5% to private equity, 7%––12% to real estate, 50%––65% to a mix of public securities (stocks, mutual funds and the like) and the rest to alternatives such as gold and hedge funds.


The gold and hedge funds percentage seems inflated to me for a "conservative" investment advisor.
Link Posted: 3/30/2009 5:00:57 PM EDT
[#16]
You're a good man Austrian.

I'm sorry / glad to say I've never personally needed your advice, but should I be cursed with big winnings, I've got it on my hard drive.

John
Link Posted: 4/17/2009 6:24:49 PM EDT
[#17]
...bump...
Link Posted: 4/17/2009 6:53:45 PM EDT
[#18]
Dupe

Link Posted: 4/17/2009 7:00:46 PM EDT
[#19]
As long as I keep my hateful nature Id be fine
Link Posted: 4/17/2009 7:12:44 PM EDT
[#20]
Once in a while, I'll buy one (1) ticket if the jackpot gets big.  I figure, I God wants me to win, I only need one ticket anyway.  My father told me not to claim the prize myself but to bring the ticket to a lawyer and have a trust or something like that claim the ticket.  That way, the winner would really be a piece of paper and I could remain anonymous to the world.
Link Posted: 4/17/2009 7:43:33 PM EDT
[#21]
Link Posted: 4/17/2009 7:50:17 PM EDT
[#22]

Thanks again for posting this.

Didn't someone on the old thread post how some guy got lawyers to pick up the check?

The Lottery people never found out who the winner was.

That's the way!
Link Posted: 4/17/2009 7:57:08 PM EDT
[#23]
So I'm still curious about how to avoid as much tax as possible in this scenario.  How would one dodge the massive income tax from the initial payout?  Form a trust, and then sign the ticket as a trustee?  Do as the poster above states, and have lawyers hide my identity?  Some other way to invest it so that I only get taxed on cap gains instead of income tax?  Inquiring minds want to know...
Link Posted: 4/17/2009 8:10:10 PM EDT
[#24]
Quoted:
So I'm still curious about how to avoid as much tax as possible in this scenario.  How would one dodge the massive income tax from the initial payout?  Form a trust, and then sign the ticket as a trustee?  Do as the poster above states, and have lawyers hide my identity?  Some other way to invest it so that I only get taxed on cap gains instead of income tax?  Inquiring minds want to know...


See, now that would be a question you ask the white shoe lawyer you hire.  But don't count on beating the tax man; the money is coming from him to begin with!

ETA: I don't think you can beat the initial taxes they take.  Whoever claims it would have to pay the taxes, and obviously you can't put it in a trust until you have it.  And it's not much mystery what bracket you're in....
Link Posted: 4/17/2009 8:16:14 PM EDT
[#25]
Quoted:
So I'm still curious about how to avoid as much tax as possible in this scenario.  How would one dodge the massive income tax from the initial payout?  Form a trust, and then sign the ticket as a trustee?  Do as the poster above states, and have lawyers hide my identity?  Some other way to invest it so that I only get taxed on cap gains instead of income tax?  Inquiring minds want to know...


I don't believe you can dodge the initial payout tax (windfall).

Your winnings are coming from the state...they know how much you won and will take their share from the top.

Konger

Link Posted: 4/17/2009 8:17:44 PM EDT
[#26]

Wait, do I have to give money to a family fun? What if I'm a cold heartless bastard who is selfish and stingy? Can I just ignore everybody asking for money?

As far as I'm concerned it would be an immediate family only thing.
Link Posted: 4/17/2009 8:27:26 PM EDT
[#27]
Tag for later reading.  Fascinating stuff!  Thank you to the OP for posting it.
Link Posted: 4/17/2009 8:28:54 PM EDT
[#28]



Quoted:


So I'm still curious about how to avoid as much tax as possible in this scenario.  How would one dodge the massive income tax from the initial payout?  Form a trust, and then sign the ticket as a trustee?  Do as the poster above states, and have lawyers hide my identity?  Some other way to invest it so that I only get taxed on cap gains instead of income tax?  Inquiring minds want to know...


There is no way to beat it but rather ways to delay it and reduce it.



 
Link Posted: 4/17/2009 9:10:48 PM EDT
[#29]
Quoted:
Quoted:
And don't fly to Australia






He was referring to Hurley, a character on LOST, who won the lottery and flew to Australia prior to crashing on the Island... Bad mojo, not a misunderstanding of your username.    
Link Posted: 4/18/2009 6:18:35 AM EDT
[#30]
Quoted:


He was referring to Hurley, a character on LOST, who won the lottery and flew to Australia prior to crashing on the Island... Bad mojo, not a misunderstanding of your username.    



Dude, you wasted your first post on this?

Welcome to the madness.
Link Posted: 4/18/2009 6:33:04 AM EDT
[#31]
Tag for when I win the lottery.
Link Posted: 5/24/2009 6:15:56 AM EDT
[#32]
I figured that since the powerball was up to 222 million for wednesday's drawing....this should be bumped.




but no need for y'all to play.  I am going to win already.
Link Posted: 5/24/2009 6:35:07 AM EDT
[#33]
Thomas Strong: $3 million. Texas. 1993. As of 2006: Died in a shoot-out with police.


That's the way we party in Texas!



Link Posted: 5/24/2009 7:09:22 AM EDT
[#34]
Quoted:
Thomas Strong: $3 million. Texas. 1993. As of 2006: Died in a shoot-out with police.


That's the way we party in Texas!





Link Posted: 5/24/2009 7:19:46 AM EDT
[#35]
Judging by what the folks I see buying lottery tickets look like, I'm surprised that the number of winners who end up broke isn't even higher.
Link Posted: 5/24/2009 7:20:49 AM EDT
[#36]
Quoted:
And don't fly to Australia


Jim Carey

Lloyd: "That's a lovely accent you have. New Jersey?"
Woman: "Austria."
Lloyd: "Austria! Well, then. G'day mate! Let's put another shrimp on the barbie!"

Link Posted: 5/24/2009 7:33:01 AM EDT
[#37]
I've considered what I'd do in the event of a major lottery win.





It starts with a good attorney on retainer,  a move to a very secure community with full-time manned gates at all entrances,  and


a bodyguard whose sole purpose is to ensure that the beggars and get-rich-quick schemers never get a chance to get within earshot of me.





Anyone who asks for a penny will get NOTHING, EVER.   All beggars are refused before they can even make their pitch, and that applies


to people wanting to offer a business opportunity as well.  





All charities are told to take a hike if they approach me.   Only the charities that totally ignore me have even a ghost of a chance of getting


a dime from me.





Then it's time for a major family meeting.   In this meeting,  usable but not extravagant amounts of money will be given as gifts to


those who are arguably deserving of it.   Those with problems (such as an alcohol problem, if any) will be given help by paid treatment.





And then here's the bombshell:  All younger members of the family, take note:  I PAY A BOUNTY FOR MASTER'S DEGREES.  A BIG ONE.





Get a Master's Degree in a useful field,  and I'll reward you handsomely for it.  And I pay a bonus for a particularly good GPA.  Deductions


for low GPAs, failed classes, or taking longer than the usual four years to get it.   But, the bounty would not be enough to live the rest of


your life on.  It would be a hell of a kick start for life, but the Master's Degree would also be that, as well.   I'd intend to set up my younger


relatives for SUCCESS BY EARNING IT.   I'd just be bribing them to get there.





A family trust fund would be set up for the extended family's use.  How it's used and who's part of it would be clearly defined.  



I do not drink, I do not smoke, I do not do drugs, and I have never tried them.  I have zero interest in such things and no matter

how much money I may ever have, I never will.    I'd spend a large discretionary income on flight lessons and ownership of my

own aircraft, something fast and frightening,  possibly an F-16 if I could manage to make the deal happen.   I'd have arguably

the world's best home theater and music system.  I'd have my own machine shop, my own wood shop, my own general purpose

hobby shop, and my own warehouse.   And a pretty modest house.  3000 square feet would be almost too much for my tastes.





As I write this,  I've got a stack of unchecked Powerball tickets I got for my birthday and I haven't heard one word about what happened


on the Powerball last night.  I don't even know if there was a winner.    It may be interesting to find out.   I wouldn't object if it's VERY


interesting to me.
CJ

 
Link Posted: 5/24/2009 8:22:17 AM EDT
[#38]
Austrian,

Could a corporation be formed to accept the winning ticket - what are the pros and cons of this - or does the lottery only pay out to individuals?
Link Posted: 5/24/2009 8:36:38 AM EDT
[#39]
I'd suggest moving out of town as well - to somewhere filled with mega-rich and famous people or to somewhere ridiculously isolated.

In Bumfuck, WV, $300 million will make you stand out like a sore thumb. In Monaco, Dubai, Hollywood or Manhattan? Who cares about another millionaire?

Link Posted: 5/24/2009 8:37:39 AM EDT
[#40]
Good post.  I'm sure that will come in handy.  
Link Posted: 6/18/2009 10:54:05 PM EDT
[#41]
this is easier to search for when it isn't in the archives.
Link Posted: 6/19/2009 12:10:16 AM EDT
[#42]
Quoted:

Wait, do I have to give money to a family fun? What if I'm a cold heartless bastard who is selfish and stingy? Can I just ignore everybody asking for money?

As far as I'm concerned it would be an immediate family only thing.



Yes you do.  This is a required payoff and the only way to shut them up.

Unless you never plan on speaking with anyone in your family, ever again that is.  By setting up a trust that guarantees college education for your brothers'/sisters' kids and possibly home/car purchase help you can say that you've already done your part and you won't feel guilty.  If they want more, you come back with "I've already coughed up $15 million - how much more do you want?"  That should keep pretty much anyone quiet, and those that aren't should probably be beaten away from any potential witnesses.

Link Posted: 6/20/2009 4:08:20 PM EDT
[#43]
I never have to worry about winning the Lottery as my Luck sucks
I came into a good chunk a few years ago, everyone said I would be broke, I own everything I have, House, Vehicles, Land and have some in the Bank so IF I ever did win the Lottery, I think I would be OK, of course I would buy 4 New Boats and set my Kids up.
Then I could avoid all the other people want ing money from me.
Link Posted: 6/20/2009 4:23:37 PM EDT
[#44]
Should I ever win the lottery, I'm buying a boat big enough to live aboard for the rest of my life. Local assholes find out I'm loaded, or my family finds me? Hoist anchor and sail off to the next fantasy destination.

Kharn
Link Posted: 6/20/2009 5:23:03 PM EDT
[#45]
Oh so tagged... I have a rule, I only buy a ticket when the jackpot hits $75 million... Powerball's at $86mil right now. Cross your fingers that I have to make a phone call Monday morning!


BTW.... How much would it take to buy a membership for everyone on the board with, say, 500 posts?
Link Posted: 6/20/2009 5:33:01 PM EDT
[#46]
If people knew how to handle large sums of money ,they'd already have money to begin with.

I'd NEVER EVER want to win the lottery........No one should ever know how much money I have
nor should people come begging to me.
Link Posted: 6/20/2009 5:47:37 PM EDT
[#47]
Hey Austrian, that's a long list of law firms but not too many good ones
Link Posted: 6/20/2009 6:19:54 PM EDT
[#48]
Quoted:
Hey Austrian, that's a long list of law firms but not too many good ones


so what are the good ones
Link Posted: 6/20/2009 6:38:19 PM EDT
[#49]
On the Texas Lottery, cash payout is about HALF of the jackpot.  So for a 3 million dollar jackpot, you win 1.5 million. But if you take the annuity, you get $120,000 pre-tax.



IF you can invest that 1.5 million at 6%, you might make it EVEN.  But then you have to find tax sheltering AND have it in secured investments.  But that is nigh impossible these days.
Link Posted: 6/20/2009 6:49:52 PM EDT
[#50]
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