4 Things A Financial Planner Can Do To Help Lottery Winners

30 April 2021
 Categories: Finance & Money, Blog

For many individuals, winning the lottery is something that seems like a problem solver. The thought of having millions of dollars might appear to be the answer to making life easier. However, many lottery winners discover that having access to a tremendous amount of money is life-changing. The changes are not always pleasant. Some lottery winners have squandered their winnings in a matter of years due to irresponsible spending habits and poor decisions.

Have you ever considered what you would do if you won the lottery? The best thing that anyone who wins the lottery or receives another type of financial windfall can do is to ensure that they seek the services of a financial advisor. These professionals can ensure that proper financial planning is implemented. The following points represent a few key things they can address to ensure that the money is allocated and dispersed properly.

Tax Considerations

Financial advisors may not offer their clients tax advice. However, they are usually aware of ways to lower tax liability. Efforts such as charitable contributions can lower tax liability because charitable donations are tax-deductible. A successful financial plan will likely entail paying the taxes from the winnings first. The next focus will likely involve determining how the net winnings will be spent. 

Estate Planning

Most lottery winners will want to create an estate plan. This will ensure that their wishes are honored in the event of their death or a tragedy involving incapacitation. An estate plan involves more than creating a list of who gets what tangible property. Including a financial planner in estate planning is the best way to ensure that the plan is thorough and legally binding.

Create a Budget

If you win millions, it is normal to not want to be told how to spend the money. Financial planners can help in the beginning by monitoring their clients' initial purchases. However, after the moments of initial spending, it is imperative that they help their clients create budgets to ensure that they do not spend beyond their means. It is possible to spend millions of dollars if a budget is not in place. 

Ongoing Monitoring

Lottery winners need to ensure that they keep a financial planner in their lives. This is because life changes may occur that require making amendments to the original financial plan. Family disagreements or death might result in a need for changes to the estate plan. If a property is sold or purchased, these changes would also need to be outlined. A financial planner can also consult with clients to determine whether it is wise to make a costlier purchase. 

Contact a financial advisor for more information.