One of the first things people say to do if you win the lottery is get a lawyer. But, as silly as this question may sound, just what is it that a lawyer will do for you in this situation?
I assume the state isn’t going to try to rip you off in awarding you your millions. I like to think I’m smart enough to ward off any random scammers that might come knocking on my door or calling me out of the blue. Any investments I might make, or stocks, bonds, retirement plans I might buy, will be strictly through a reputable financial planner. I’ll get a good accountant to work out the tax issues.
I guess estate planing would be something that you would need a lawyer for. As my wife and I are fairly young and don’t have any kids yet, I don’t know if that would a particularly complicated matter to sort out, though, and something I’d need a full time lawyer for.
And just what type of lawyer should one seek out? And how do you seek out one that won’t rip you off? As someone who’s only ever had to use a lawyer to get out of speeding tickets, I wouldn’t have much idea where to start looking for a lawyer who handles the types of issues that might arise with a massive lottery win.
Off the top of my head, there will be a lot of financial contracts. Buying a helicopter and/or Ferrari, paying off the in-laws, giving a million to the Moonies etc. All these things need contracts and having a lawyer take of the paperwork saves a lot of heartburn in the future.
I think most people are hoping the lawyer could help them claim the prize anonymously.
Beyond that, yeah, I guess estate planning would be the big thing. Of course, if you do what the majority of folks do (per the urban legend) and invest it in hookers and blow, you won’t need to deal with estate planning. So, more hookers and blow.
You hire a lawyer and an accountant to check things out before you sign them and to keep track of your tax and legal liabilities. You may also want access to a good lawyer to protect you from the wacko/vultures/relatives/charities/ex-girlfriends, etc. that come with the prize.
Then you will need to hire another lawyer and another accounting service to audit your main team to make sure they are not ripping you off.
After that, it’s lawyers and accountants all the way down.
I think a lot of people might say lawyer but mean accountant/CPA. I assume people want a lawyer to deal with the tax issues and since that’s a ‘law thing’ their mind goes right to ‘lawyer’. Most people only deal with an accountant/CPA once a year, if that, but they hear about lawyers all the time on TV and talking to other people.
OTOH, my dad (and there for me as well) has always said that if he ever one the lottery the first person he’d tell is his CPA. But since our family owns a business, we’ve always had a CPA close by to handle our money issues so it’s a lot more natural for us to think about an accountant whenever money comes up.
I would secure the services of a lawyer so that I could collect the winnings anonymously. While this would not prevent a determined scammer from learning my identity, it would certainly minimize the amount of incoming requests for money from random crackpots.
The other major benefit to having an estate planning lawyer on retainer would be the vast difference in responsibilities between my current day to day life, and my responsibilities after winning half a billion dollars. When it comes to being rich, I am not even aware of how poorly informed I am. I would need assistance in making the transition from being a wage earner to a person of means. I would want someone with a firm grasp of liability to guide me through that process. When a poor person pulls a dumb stunt, what are you going to do? Sue them? When a rich person makes a mistake, the consequences can be quite different.
I’m not saying I’d need someone to run me through a knife and fork academy, but I would definitely need to learn how to avoid making myself a flashing neon target for a litigious deadbeat. I have enough people that I would voluntarily support. I don’t need to be adding any jackasses to my list of monthly payments just because I didn’t know how to handle my affairs.
Not everyone will feel this way. A lot of people are easy come, easy go with money. I am not one of those people.
Well, if I win the lottery, I can hire Hugh Jackman to dress up like a lawyer and enact scenes from To Thrill a Mockingbird or A Few Really Good Men for me.
I have a trust and estate plan (in California it is very common) but the intricacies of it would be far greater with hundreds of millions of dollars. You might not have any kids now, but you’d want them to be protected from the second they popped out. We found our estate lawyer was very helpful in guiding us through all the far-fetched possibilities. I agree with collecting it anonymously, if possible.
I have a good financial planner, but if I won that much money I’d get two more in different companies, and split my investments among them. I’d not want to put all my nest-eggs in one basket.
I’d need a tax lawyer or a CPA as part of my winnings would be going to family members, and I’d want to structure it to minimize tax liabilty for all of us.
As far as telling random strangers to fuck off, I don’t need a lawyer for that. ETA: Possibly a social secretary.
An accountant seems more important at first than a lawyer. He’d know how to reduce your tax liabilities. A financial adviser is also very important in planning a strategy on what to do with the money.
First call is to a doctor that specializes in vasectomies. That should help prevent many of the possible scenarios in which a lawyer would be needed later.
Sure, an account and financial adviser can help you invest downline. That’s after you collect. Before you submit the ticket an attorney can advise you how to present that ticket. Do you present as a single owner? Does your wife or other family member become a co-owner. Maybe there is a close friend or relative who you would give a substantial amount to. You might want to include them as a co-owner to begin with and save taxes. It is seldom smart to play at another person’s profession. An hourly fee for legal advise could save millions.
Why would you think you need a lawyer to give money to relatives or to a religious group or charity? Do you give money to any of these groups now? Have you ever needed to document the gift in writing?
As for what you might need a lawyer for, estate planning certainly is one aspect. But even more pressing than planning for your death, let’s hope, is planning for its partner in inevitability: how to minimize the tax impact of the winnings.
Technically you don’t need any of that stuff. You can just declare your lottery winnings as “other income” and pay taxes accordingly. In fact, I don’t know how you would even get around that. But then again, I’m not a CPA.
You’ll probably want to buy a new house. You need a lawyer for that.
You’ll probably want to talk to a financial planner. Most large financial institutions have “high net worth individual planning” services.
Also, you’re part of the 1% now, so you need to stop thinking like a 99%. It’s fine to give money away to charity and whatnot. But just remember that 99% of the world now hate-envies you and will constantly be trying to figure out ways to separate you from your hard-won earnings.
If you are giving a lot of money you have to document it and pay gift tax. Charitable donations are tax deductable. Why wouldn’t you document this stuff?
Fascinating to me that when people are contemplating winning more money than they could reasonably spend, the first thought for so many is making sure they pay as little tax as possible. So you win $500 million and $250 million goes to taxes. You still have $250 million. Geez.
I always think it’s funny that when you tell someone that the lottery is at (for example) $10 million they’ll almost always say “Yeah, but it’s only like 7 million after taxes” Ummm, so, you don’t want the 7 mil then? They act like after taxes they’ll be left with fifty bucks and it’s not even worth the trip to the gas station to get the ticket.