Lottery Winnings - Spread The Wealth A Little Or Not?

In My Humble Opinion
1

Inspired by this post in the lottery ticket buyers thread, I wanted to get some feedback on a recent situation, and have you guys share your own stories about you or a family member winning fairly big and what you/they did for the rest of the family.

Let’s start with the disclaimer right at the start, and hopefully we can have the discussion without getting bogged down on this point - IT IS THEIR MONEY TO DO WITH AS THEY WISH. I fully, completely understand that when someone wins something, it is theirs, period, end of story.

That said, my sister and brother-in-law won a $500,000 house and contents in a home lottery last year (probably worth about $600,000 now in our insane real estate market). They were already the wealthiest members of the family; my sister is a very well-paid professional, and they already owned two houses in Calgary. This latest win puts their assets (that I know about) at over 1.5 million dollars.

Their version of spreading the wealth - they took all the immediate family out for dinner at a cheap restaurant. They needed to sell some of the furniture from the new house because they had no room for it, and they wanted top dollar for it from family (so family did not buy any of it from them).

I’ve always thought that I would spread the wealth around at least a little if I won something big, but maybe you don’t think that way when you win. Have you (or a family member) ever received a windfall like this? Did you or they share it with family at all? Am I being petty for even noticing how little they did for family when they had a very large win?

2

Yeesh, your sisters are a couple of pieces of work, featherlou! How’d you turn out so normal? :wink:

When I fantasize about winning the lottery, part of it is always, how would I share it out? However, I can never find any way of doing it that wouldn’t end in tears. (If I give this much to the unmarried aunt, how much to the other aunt and uncle, etc.) Fortunately :dubious: I haven’t had any windfalls yet.

3

Well, the win wasn’t cash, so that makes things a bit more problematical. For me, all my lottery fantasies include scholarship funds for my friends kids. I might not give them cash, but I can relieve them of some financial worries/burdens down the line.

4

It ticks me off that wealthy people buy tickets. People who are already millionaires got their pile; they should have to step back and let regular schlubs have a chance.

Yes, I’d spread it around, but even a million bucks doesn’t go far these days. However, if I already had two houses and enough bucks in RRSPs to keep me in food and shelter through my old age, for sure I’d get happy buying prezzies for my buds (who are my family in absence of much actual family).

What I’d like is to win enough that I could do both but also make a sizeable donation to charity. Which is purely selfish. I’m so tired of feeling helpless about all the awful things in the world; it would feel so good to be able to give a hunk o’ bucks to something that might make a real difference.

5

While I’d hesitate to judge your family (except maybe trying to sell used furniture for top dollar), I’ve always thought that if I won huge, I’d go into my phone, and anybody that called me just to say hi or whatever in the last two months would get put back at zero debt and their kids would have college funds.

Everybody else could take a walk.

6

Spread it a lot. On my side of the family anyway. My mom did it, I do it, and my kids do it. My mom used to say “If I’ve got money, we’ve all got money.”

She and my stepdad shared an inheritance and an injury settlement with me and my brother. Tax refund time meant shopping trips and dinner out.

They weren’t well-off but they had enough, and it just didn’t occur to them not to share.

And mom never sold anything she was getting rid of. It just wouldn’t have occurred to her to ask for money for a piece of furniture or an appliance she was replacing. Me neither. The only things we’ve sold* to family have been a boat and motor and a near new snow-blower.

*Meaning we’ll get paid someday but if we don’t, it’s no big deal.

7

I assume you mean hitting it big enough to actually DO something with it, rather than, say, $30k, which might pay off your house or car or whatever but isn’t enough to really help anyone but yourself.

Well, after paying off all my debts (including house!), and my parents’ debt, I’d sock away enough to retire on and put my kid(s) through school. If there’s enough left over…

I’d pick a savvy investor, hand them a whopping pile of money, and tell them I want it to grow steadily. This would be my living fund – what I live and play off of.

Next, I’d pick myself a couple of not-quite-able-to-afford it students (doctors, lawyers, whatever profession I needed) and offer them a 0% interest loan that they need never pay back if they don’t want to, provided that I get their professional services for free until they DO pay back the loan.

If there’s enough left after all THAT, I’d buy used, broken vehicles and donate them to a local ministry, which is accepting cars in ANY condition and using them to train homeless/jobless folks in auto mechanics. If they stick with the program all the way (which includes counseling, if needed), they get to keep the car they fixed at the end, and the ministry helps them find a job. Hell, I’d start similar programs in other cities, if they don’t already exist.

Also, I’d like to revive the patronage system, in a way. I know several people who, for one reason or another, can’t make a living off their creative works. I’d offer them a stipend so that they can continue to create – probably not a full livable salary, but enough so that they’d only have to work part-time.

At one time I sat down and calculated some of this out. I don’t remember the specifics, but the figure $30m is sticking in my mind.

I know I could accomplish the first and probably the second with a ‘measly’ million, so anything beyond that is gravy. :slight_smile:

8

I KNOW! :smiley:

silenus, that is definitely a factor. Their winnings are not liquid cash, but a very valuable asset. I can see where that would make a difference.

I can’t help but make a comparison to this attitude in contrast to my aunts and uncles on my mom’s side a few years back - my grandma died, and her seven children split the modest inheritance seven ways. One of my uncles gave his share to my mom because he had enough money, and knew that she needed it.

9

Heh. That does sound pretty crappy. On the other hand, I’m not very close or enamored of my family so I don’t know that I’d be all that inclined to give them that much.

Who I would donate a lot of money to though is HIV/AIDS research/prevention/treatment organizations. I don’t have HIV, but I think it’s one of the worst medical scourges on our planet right now and I empathize greatly with the millions who are fighting with it.

10

I’ve thought about this many times. Between me and my wife, we together have 50 first cousins and aunts/uncles, not counting our own siblings and parents. Some cousins are financially well off and have multiple millions (and lifestyles that are consistent with that wealth), some are just starting out in the work force, and some are struggling to raise their families. My wife and I have discussed whether, should we be faced with an embarrassment of riches, we should give every family the same amount; give proportionally to their need; or give nothing. Any option seems to guarantee backlash- why did we get the same as X and his wife- they’re set for life! We should get more! On the other hand, how do you quantify need? It’s so subjective. The families that are just getting by might be perfectly happy, and would prefer we donate their portion to charity, but the richer family might have some real need that’s just not evident without an inspection of their books, which admittedly is none of our business. Not giving anything seems unreasonably parsimonious. It’s a tough call.

Unfortunately (or fortunately), nobody in my family has ever been faced with the issue, as far as I know. I wouldn’t bee too hard on them though, although I would probably only agree to may market rates for the used furniture and nothing more. A home and furnishings isn’t a good indicator of their actual cash flow.

11

With all due respect to the OP, winning a house isn’t the same as winning cash, and saying they’re “worth $1.5 million” does not make them rich these days. That’s enough to retire on if you wait until retirement age but it’s not like they actually won $1.5 million. I would have been a bit more generous than a cheap meal and asking people to payfor furniture I had no use for, though. But that’s my family; if you don’t need something and someone else does, you give it to them.

If I actually won a lottery jackpot, half goes to family; 25% to my side, 25% to Mrs. RickJay’s side. We’ve always had that planned. But WHICH family is quite specific, because I have relatives who deserve nothing and would blow it on gambling if I gave them anything.

12

I think the fact that it’s an asset and not cash is a huge factor. Depending on how the taxes work out, this may actually tighten up their cash flow quite a bit in the short term if they want to keep the property and not sell it off immediately. If they have to come up with the taxes on half a million dollars in the next year, then I wouldn’t expect them to be passing out checks or expensive gifts.

Even if there isn’t a tax issue, adding an asset to their portfolio is a lot different psychologically than a huge cash windfall. Smart investors learn to not think about their investment principal as spendable money, so they may not even be thinking of themselves as having that much more money right now.

This is not to say that they’re not obviously very well off, of course, just to give some possibilities (beyond greed and selfishness) for why they wouldn’t have immediately shared their windfall.

13

If I win big, I do plan to spread it out a bit to immediate family. Mind you, this is winning big. A million isn’t going to cut it for all I would like to do, but even if I get just that I’d give my family a little.

Top of the list things include paying off Grandma’s mortgage (both my brother and I have said this), a house or condo for Dad, buy Nana’s house (which does two things, gets me my dream home and enables her to buy the smaller place she’s been wanting), give some to my brother so he can pay off a vehicle and finish his courses.

Along with the usual stuff of trips, investing etc for myself.

ETA: I see you now specified assets not liquid cash. Well, probably not then. Money it’s sort of unspoken in the family you’d share out at least a little but actual things it’s a bit harder to share out (unless you sell it and then share out).

14

I wouldn’t give any (adults) anything at least right away. It isn’t because I am cheap, it is just because I think it is a bad psychological move. People are screwy with money and giving out gifts right away will probably be met with more spite and resentment than not giving anyone anything. We already had a lottery winner in out family ($4 million) and it was one of those cases of being the worst thing that ever happened to him (mainly all his fault). He wasn’t even close to being the richest person in the family after the win and things still went all to hell.

I would give family $0 right away. In fact, I assume that no one would know because I really wouldn’t want them too. After that, I would set up a trust as a general scholarship fund for my very young nephews and give it time to grow for 16 years and more.

I am very good with money and I have a good sense of the psychology behind it. You can’t assume the best about anyone you give it to. I recently found out that I am an heir to my grandmother’s estate when she dies (hopefully not soon). I always knew she was some type of multi-millionaire but it was quite a shock to everyone, including my father, just how big her estate is. We have always been close and she just told me that she didn’t want the burden assocatied with people, including her children, knowing that until now. I think that is very good advice.

15

In the lotto thread, I talked about how that $1 or so was worth the daydreams.

My daydreams usually involved buying myself a house and a car, brand new, that no one had ever owned, and then surprising all of my closest friends and relatives with stuff.

I’ve literally fantasized about all of the things I’d buy everyone. It seems stupid, but I love doing shit like that. It’s just one of those things. I always said that if I hit megabucks, I’d buy everyone houses. First, my parents, wherever in the world they wanted (most likely Hawaii) because they rock. Second, my sister, even though she can be a bitch, because she’s my sister. Third, my husband’s ex-girlfriend, because she’s genuinely cool and deserves a place to raise her kids, considering she’s worked her ass off her entire life and been screwed by the companies she worked for.

Then I thought of all of the mystery gifts I’d buy people. Our crime reporter deserves a new car. She runs hers into the ground rushing off to cover things even in the middle of the night. I’d buy her something brand-new with a great warrentee and give her full coverage insurance for a year. Anonymously, if I could, because it’d be weird at work otherwise (and yeah, I’d probably keep my job because I do adore it).

Then, I’d get some of my best friends stuff. Most of my friends are poor; one of my friends because her father is a single parent so she basically lives with him and her brother, working her ass off so that the rent can get made every week for both of them; another because she’s a double major and her mom’s a fuckoff so they never have money. Every single one of my friends would get a new car and at least a condo, if they wanted. This is, of course, all assuming I hit something huge.

I guess to sum that TLDR up is that I would take care of myself, but I’d definitely spread it around a bit. I’ve had a lot of people take a chance on me or help me out before and I figure that if I hit it big, it’s my chance to repay it.

Oh, one thing I would love to do, is make a HUGE cash donation to my old ROTC unit at the high school, and to the English Language department, and the vo-tech department, but pointedly leave the sports teams out. When they redid the school budget after the new principal came in, he cut all of those budgets and gave the cut to the sports department. Like better equipment is going to make those teams any better.

~Tasha

16

I would have given the furnishings away if it were my decision. Nothing lost if you never had it to begin with.

As for a cash win: on $1.5M, I’d probably keep half for me, one quarter to the family, and one quarter to charitable causes, and I would probably make that a family project.

17

Those are excellent points. I can also see someone who won big saying that whatever they did, family wasn’t satisfied (as you can see from my OP - even if it’s a smaller win or an asset rather than cash).

It really is different as an asset win rather than cash, isn’t it? I think this will help get my head right about this. I have a certain amount of jealousy over this (of all my family, they are the people who least needed a win like this), but I will count my own blessings and not worry about theirs. And even if it had been cash, they would still have no obligation to give anything to anybody.

18

Interesting. I can certainly see what you’re saying. It would be nice to help struggling family, but everyone seems to think they have a claim to something and have advice about what you should do with your winnings. Maybe giving nothing to everybody is the smartest, healthiest thing to do.

19

I agree that winning something non-liquid like a house is a lot different than winning cash.

That said, I wanted to confirm one point. In Canada, we don’t pay taxes on lottery winnings. We also don’t pay on game show prizes (unless of course a Canadian is on an American game show in which case US tax is paid), or on gambling winnings unless the person is a professional gambler at which time it is taxable as income.

20

I’m another poster in the camp that wouldn’t give anything, at least right away.

I wouldn’t even spend anything on myself! Not the principal anyway. I’m certainly not handing any of it out to people who would probably waste it and end up with bad feelings for my trouble.

I would make sure that everybody in my extended family had college paid for, by starting funds for the kids young and letting the money grow.