Here's what you should ACTUALLY do if you win the lottery
What’s the first thing you’d do if you won the lottery?
Many have bought their dream home, some their first-ever cell phone, and others have even invested in burial plots.
While it might be fun to daydream about nabbing the winning ticket for a jackpot of over one million dollars, in reality, it can be an incredibly emotional experience.
We (unfortunately) don’t have any first-hand knowledge of this, but financial advisor Stephan Desbiens — who has advised a handful of lottery winners — has seen how paralyzing it can be behind the scenes.
“As any emotional experience, it tends to overwhelm you, and that’s where it’s important to just sort of, get a grip so to speak,” Desbiens told Daily Hive.
You never know when the odds are going to be in your favour, so it doesn’t hurt to be prepared and prevent yourself from making any rash decisions.
Whether you won $5,000 or $60 million, here are the steps you should actually take after you’ve won the lottery, according to a financial expert.
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Stop, think and breathe
So, you just found out you have a winning lottery ticket? Before you go to claim your prize, Desbiens advises you to stop, think, and breathe.
“Just take a pause and a moment, a real moment to sort of figure out what just happened,” he said.
The Exponent Investment Management advisor says that based on feedback from his clients who have won the lottery, that’s not an easy thing to do.
“You’re in an absolute fog when you win a large prize,” he explained.
He gives the example of one client who cried for hours during their first meeting.
Desbiens says the emotions had to do with some of the bad decisions the client had already made — and this was just days after they had claimed their prize. He knows his client is a smart person, but winning a large prize was so overwhelming for them that they couldn’t handle making important decisions.
Sign the winning ticket and hide it in a secure spot
Where not to leave your ticket:
- In your car
- In your wallet (which is easy to misplace)
- Somewhere in your house (where it could also easily be misplaced)
Desbiens recommends opening a safety deposit box at your bank and stashing the ticket there until you have a plan and are ready to claim the prize.
It may sound extreme, but if you’re the lucky winner of a whopping $70 million jackpot, you should probably be taking extra precautions.
Don’t advertise your win to everyone on your contact list
After you’ve come to terms with the life-changing win, and have hidden your ticket, you may want to call all of your friends and family to give them the good news.
Desbiens advises that you resist the temptation to do this.
“I think that’s a very important piece of the puzzle,” he explained. “Until you’re actually ready to deal with it, I would keep it to myself and my spouse, maybe even keep it from my kids.”
Why do you have to be so hush-hush about it? Because you should ideally have a financial plan set in place before you claim the ticket and your personal information gets publicized, says Desbiens.
“The thing that people don’t realize is once the wheels have been set into motion in terms of going to claim your prize, everything else from that point is almost irreversible, meaning the publicity will be there,” he said.
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To put it simply, lottery winners lose their anonymity once they claim their prize. In Canada, provincial lottery corporations have rules that require a winner to have their photo taken, and publicize their name, current city of residence, occupation, marital status, and more.
The BC Lottery Corporation (BCLC) says it does this for transparency and promotion.
Moreover, most provincial corporations can withhold a prize if a winner refuses to give written consent to publish their personal information.
So, is there anything bad that could happen if your information gets out there?
“The phone calls and attention will come from many different places,” explained Desbiens.
Worst case scenario, scammers can get a hold of your personal information and reach out to you, but Desbiens adds that second cousins, childhood friends, and old coworkers can come out of the woodwork to ask you for money if the prize is hefty enough.
Get a financial advisor, or lawyer, and draw up a plan
Desbiens says the next step is to meet with a financial advisor, lawyer, accountant, or all three if you have access to them.
He highly recommends that you draw up a short-, medium-, and long-term financial plan even before claiming your prize (which you can claim at any time).
This might include a gifting strategy, investments, and a retirement plan.
Desbiens says having a gifting strategy is important in order to set boundaries with who you want to share your wealth with, when, and where to draw the line.
In terms of investing, Desbiens says there are a couple of routes you can take.
“You could do anything like build yourself a stock portfolio, or a real estate portfolio,” he said.
“You can also buy an annuity where you turn over a certain amount of money to an insurance company and they will give you a pay cheque for life from that money,” he added.
Another example Desbiens gave of short-, medium-, and long-term plans are buying a home in the short-term, saving up to invest in a cottage for the medium-term, and then selling that cottage so you can spend your retirement as a snowbird in Florida for the long-term.
Many may also fantasize about quitting their job if they ever win big. Desbiens says the viability of that depends on how much you’ve won.
“If you hate your job and you won $70 million, then you can make that decision very comfortably,” he explained. “But I’ve seen people win $2 million, quit their job, and end up in a situation where they had to go back to work.”
Sadly, $2 million isn’t a lot in this economy.
Turn in your ticket, claim your prize, and change your contact info
Once you’ve claimed your prize, and have done all of the necessary PR for the provincial lottery commission (which can be anything from an article online to a video on Instagram), you can kiss your anonymity goodbye.
This is why Desbiens advises winners to change their contact information like phone numbers, emails, and social media if they can. He says to only share that information with close friends and family.
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Let your money chill in the bank
The first thing you should do after you collect your winnings is immediately deposit them in the bank.
After that, Desbiens actually recommends that you refrain from taking any immediate, big financial actions.
He says that banks will probably insist you meet the branch manager, or specialists, but stresses that they won’t have your interests in mind.
“That [winner’s] fog will probably last weeks, if not months,” he said. “So, to me, the better part of a year would be a reasonable timeline where you just let that money sit in the bank.”
“Part of the reason that people end up worse off is because they tend to do everything at the beginning and run out of money,” he added.
During this downtime, Desbiens suggests winners take a step back and let the adrenaline from winning dissipate so that they can think clearly and make better financial decisions.
If you follow these steps, at this point you will already have a team of advisors and a financial plan that will hopefully lead to a long and prosperous life as a lottery winner.
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