I'm going to be rich...assemble my staff.
February 15, 2012 10:34 AM   Subscribe

I want to be prepared (tongue-in-cheek) for when I win 300+ million dollars in the Powerball lottery. The moment my winning numbers are selected, what kind of staff should I assemble to handle the $$$, protect my family's safety, and maintain the greatest anonymity possible and any other creative suggestions...all before I publicly turn in the winning ticket?
posted by teg4rvn to Work & Money (21 answers total) 76 users marked this as a favorite
Response by poster: to avoid chat-filter...assume this question extends to sudden (and public) accumulation of wealth by whatever means...
posted by teg4rvn at 10:36 AM on February 15, 2012

This is not exactly what you asked (I assume other mefites can expand on the "get an accountant and a lawyer and don't tell anyone else!" idea that immediately came to mind) but This American Life did an interesting piece about the misfortunes that befall lottery winners.
posted by Wretch729 at 10:38 AM on February 15, 2012 [1 favorite]

You might find this reddit thread interesting. Its a Q&A session with an anonymous lottery winner.
Set up a blind trust, have a tax lawyer collect your winnings for the trust, and the lottery simply publishes that a trust collected the totals. People found out when I told a few friends out of excitement.
posted by halseyaa at 10:38 AM on February 15, 2012 [7 favorites]

Here is the Rotten Library's guide to winning the lottery. Here is the Straight Dope's forum discussing the feasibility of the Rotten Library's plan.
posted by griphus at 10:39 AM on February 15, 2012 [2 favorites]

Well, if you're going to maintain the greatest anonymity possible you set up a blind trust and never come forward. Which any good tax lawyer can do for you.
posted by dpx.mfx at 10:40 AM on February 15, 2012

blind trust, and find an already established family office open to new families. They will literally handle everything to turn your family into the plutocrats they've always wanted to be. From whom to call to get your kid into Deerfield, to who to rent your villa from, to access to a litany of investment options that are ordinarily closed to outsiders.
posted by JPD at 10:50 AM on February 15, 2012 [3 favorites]

Before you accept the winnings in front of the camera, get a haircut and a new outfit.
posted by lstanley at 11:10 AM on February 15, 2012

My own "plan" has always included
1.tax lawyer
2.tax accountant/CPA
3.blind trust
4.changing my phone number
posted by easily confused at 11:19 AM on February 15, 2012

Before you accept the winnings in front of the camera, get a wig and some Goodwill castoffs.
posted by IAmBroom at 11:43 AM on February 15, 2012 [4 favorites]

The advice I read that seemed the most sensible was - before you do/spend anything, take a 2-4 week vacation somewhere on a beach or in a cabin in the woods, and just let the idea of the money sink in. This should keep you from doing anything impulsively stupid.
posted by MexicanYenta at 12:04 PM on February 15, 2012 [3 favorites]

Don McNay is a financial advisor who works in my part of the country, who's worked with windfall clients and has a lot of expertise on lottery winners. He writes a financial advice column that's published regionally, and his most popuar columns have to do with winning the lottery.

Take a look at a recent column here and here, and his other columns here.

Summing up his advice:

1) Don't tell anyone you're not legally obligated to tell that you won. Your spouse, if you have one, and the IRS are the only ones who have to know.

Don't tell family and/or friends. The sad reality is that family and friends will drain you like a sump pump--not because they're being malicious, but because they're your family and friends. You want to take care of them, and they want to be taken care of. The resulting dynamic can be hell on your winnings.

And whatever you do, don't participate in a press conference. Every con man on the planet will come after you.

You can still take care of the people you care about, but you don't have to tell them you won the lottery. Make up any story you like. I always thought that (after the first check cleared and I had settled my debts) I would wait a year, then tell everyone I was fired unfairly from my workplace. I sued, and the company settled on the condition that I not reveal the specifics to anyone. So while I can't tell them anymore than that, I can assure them not to worry--I am very comfortable. It's specific enough to satisfy curiosity, but also closes the door to further questions.

2) Set up a trust. Don advises going to a tax attorney and having him set up a trust or other entity for you (whatever works best in the laws of your state) that can claim the money and protect your privacy.

Lottery corporations are typically subject to their states' equivalent of the Freedom of Information act, so even if the lottery corp. agrees to keep you name out of the press, they can't do anything if some enterprising reporter decides to request your name. Working with an attorney and setting up some kind of legal entity, on the other hand, can keep your name from released to the general public.

3) Take the annual payments, not the lump sum. Don stresses this one over and over.

Studies show that over 90% of lottery winners are broek and bankrupt in five years or less, regardless of jackpot size, and without having taken care of their debt (here's a recent on here). Don posits that if you get all the money at once, you'll succumb to the temptation (which will be enormus) to blow through it all at once. But if you take the annual payment, and run through it in the first year, you'lll have the twenty-five more chances to get it right.

4) Spend money on some good advice. There's a ton of tax breaks for the wealthy. When you win the lottery, you need to find people who can get those tax breaks for you. Asking for good advice doesn't mean calling the bookkeeper for your bowling league. You need someone who's actually dealt with big money. Ask some well-respected attorneys for referrals.
posted by magstheaxe at 1:39 PM on February 15, 2012 [11 favorites]

You might find this reddit thread interesting.

Like a lot of AMAs, that looks very much like a fake to me, so don't take any of the advice in it too seriously.

He's specific about things that an average person might know about (how his cost of living broke down before he won the lottery), but when he talks about less familiar areas, he starts to slip up (loads of errors about North Korea) or sound like he's trying to write a thriller. (his financial adviser is monitored by an accountant who is audited by secret auditors) The weakly-explained refusal to upload a picture of something he bought is telling, too.
posted by Busy Old Fool at 1:41 PM on February 15, 2012 [1 favorite]

Most big law firms will have a group of folks who work as a team to basically handle this for you and other newly-high-net-worth individuals (think the 22 year old 1st round draft pick). I'm friends with a few guys who manage this, and I've referred some friends there (some friends who got very, very, very eight and nine figures rich in the tech boom).

As noted above, the general procedure is to create a trust of some sort with the law firm as the "trustee", with a written trust instrument spelling out the logistics of handling the funds. The firm manages issues of investment, taxation, tax management and mitigation and other administrative burdens in return for a fee paid from the trust. Part of the trust agreement will be how you get access to the money. It is my understanding that they recommend paying out (large) fixed amounts as "salary" rather than running in and saying "I want a Ferrari! I wanna go to Paris!". Sometimes, there will be explicit terms that make it hard for you to squander your bounty. BTW, things like houses and cars can be owned by the trust but used by you; there are tax and other reasons one might do that.

Oh...yeah. The firm is generally expected to provide a periodic audit of the trust. Smart people have their own audit done by an external, third party.
posted by kjs3 at 1:58 PM on February 15, 2012 [3 favorites]

3) Take the annual payments, not the lump sum. Don stresses this one over and over.

Studies show that over 90% of lottery winners are broek and bankrupt in five years or less, regardless of jackpot size, and without having taken care of their debt (here's a recent on here). Don posits that if you get all the money at once, you'll succumb to the temptation (which will be enormus) to blow through it all at once. But if you take the annual payment, and run through it in the first year, you'lll have the twenty-five more chances to get it right.

Interesting. I've always heard that, from a purely financial perspective, this is the worse option because you'll end up with less money in the long run (due to inflation). But, from a psychological perspective, this makes a lot of sense.
posted by asnider at 2:04 PM on February 15, 2012 [3 favorites]

My dad always said that if he won, the first thing he'd do would be to pay someone $1 million to pose as the winner at the press conference.

I'd definitely take the annual payment option rather than the lump sum. Seriously, if I can't live on a few million a year, there's something wrong with me. : )
posted by SisterHavana at 5:04 PM on February 15, 2012 [2 favorites]

Anyway, as an actual answer to the question: if the blind trust thing would actually be feasible (which appears to be debatable), that sounds like the best option. You shouldn't need to hire bodyguards or anything like that, if no one knows that you're rich.

Hiring a damn good accountant and talking to an investment broker would probably be wise, but that's just good financial planning.
posted by asnider at 5:50 PM on February 15, 2012

BTW...A "blind trust" does not mean what you think it means. That's a trust where the beneficiary has no control over the use of the assets within the trust. Think Mit Romney's finances, where he want's his vast wealth to be prudently invested, but doesn't want anyone to see he invested in tobacco or pr0n or some such and use it against him politically.
posted by kjs3 at 8:00 PM on February 15, 2012 [4 favorites]

My plan:

1- Do everything I can to hide my identity as that guy who won the lottery. People will eventually find out that I won the lottery, but I will do everything I can to hide how much. One trick: invent an invisible friend with whom you had to share in the winnings. It would be pretty easy to tell the various people asking for money something like "how much money do you think I have? I had to share it with Kevin, we took the lump sum, I paid off debts, donated a bunch of it and the accountants have the rest tied up in investments. I've got $10k in my bank account right now."

2- Take the lump sum and invest it myself. It's not magic, the lump sum is the price of an annuity that pays out $X per year for 26 years. If that is the option I want to take, I'll buy my own annuity.

3- Set up a "basic expenses" trust. Making myself, and everyone I care to include, beneficiaries of a trust that will provide "paychecks" for them so they don't end up homeless. I don't want to be selfish, but I also don't want to be the money faucet either.

4- Invest in the company I work for. I have scores to settle that being a part-owner will help very nicely with... Sort of "take this job and shove it, and by the way, I'm your boss now." :)

5- Live somewhat modestly, don't attract attention. If I have the desire to be a "big shot", don't do it at home. It seems like many of the troubles that the suddenly rich fall into are the result of buying properties and friends that become albatrosses. It seems much more prudent to rent properties and whatnot. In other words, don't live like a rockstar, *vacation* like a rockstar.

6- Especially if I have, or plan to have, a family. I wouldn't want to inflict the world with a brood of progeny that have some entitlement complex.
posted by gjc at 6:35 AM on February 16, 2012 [2 favorites]

Take an all inclusive vacation that's slightly too long (2 weeks?), and don't take much cash with you other than prepaying for the vacation.

Meet with a lawyer and accountant before you get on the plane. Meet with a second set of lawyer and accountant, to get a second opinion. If someone's going to handle your money for you, and someone's going to handle your legalities for you, you want someone you feel confident working with.

Probably work with an investment adviser who's paid flat fee, and not on commission.

When you get back, tell everyone you won the trip, but not that you won the lottery.
posted by talldean at 7:58 AM on February 16, 2012 [1 favorite]

There was a family in my brother's boy scout troop who won a state lottery. They had one son, and they were all quiet and polite folks. I forget how much it was, but enough that they could be set forever, if they planned it well. The parents ran their own little business with a few employees, but I don't think they made enough to provide much in the way of employment benefits. They certainly weren't all that well-to-do themselves.

The family went on a snow trip with the boy scout troop, and the father helped my parents put snow chains on their car at night. They all did scout-type stuff for the weekend, and told no one about their sudden windfall.

They had met with a lawyer and/or an accountant before they went on their long weekend trip, and claimed the winning numbers on the following week. They changed their number, bought a house with a few acres of trees that they wouldn't farm as a tax write-off (loss of income, or something). They bought the building where they had their little business, gave their employees modest raises and benefits, and set up a college fund for their son. And, as far as I know, they kept on working. I think they enjoyed their business, and doing nothing can send you crazy (or you'll spend your money too fast).
posted by filthy light thief at 9:25 AM on February 22, 2012

Response by poster: OP here --

New York Times article
posted by teg4rvn at 12:00 PM on March 29, 2012

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