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How Would You Handle All That Money If You Won?
Old 01-09-2016, 11:32 AM   #1
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How Would You Handle All That Money If You Won?

There are several threads started on the Powerball and I have thought in the past about what you would have to do if you did win the whole enchilada. Handling a million is one thing, but handling hundreds of millions isn't so easy. I would think that you would hire a great tax attorney and CPA, create a trust to claim the winnings, etc. You can't just take a check for $495 million to the bank or call Vanguard and say "add this to my Rollover IRA account". It becomes a real job to handle it all, even though I'm quite sure that there would be no end to the line of people that would be happy to help you manage it. Maybe go to a large private banking entity, trust department of a huge bank, etc?

What would you have to do if you did win the jackpot?
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Old 01-09-2016, 11:52 AM   #2
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Exactly that. Lawyer, CPA, and massage therapist. Well, I suppose the latter wouldn't be necessary but stress kills.

Also consider the possibility of liability lawsuits from those who want some of your money. For example, people who run into your car and make (false) injury claims, and so on. So, I'd get in touch with a good general attorney to get some advice on how to avoid lawsuits of that type.

You are right that it would be a HUGE job! And I don't want a job, in retirement. I might want to hire someone to get all of this done, and shield me from having to do it myself. He'd probably help himself to more than I intended to pay him, but at least I wouldn't have to spend the rest of my life closeted with lawyers and CPA's.

All of this hassle might make me a recluse, like Howard Hughes was reputed to have been.
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Old 01-09-2016, 11:55 AM   #3
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This makes for interesting reading.

Lucky You!
Advice To Instant Lottery Millionaires!


Key point: remain anonymous.
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Old 01-09-2016, 12:25 PM   #4
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I would give most of it to you.

So if you'd like to buy a ticket and send it to me, go right ahead.
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Old 01-09-2016, 12:36 PM   #5
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Why couldn't you just put the money in an individual (not IRA, other than what little you might be allowed to contribute to) account at Vanguard? Or spread it out at VG, Fidelity, Schwab, and maybe a few other low cost brokers? Wouldn't my same AA work for a mega account? Or could I get even better institutional fee rates with that kind of money? I've often wondered how mega millionaires and billionaires who don't have their money tied up the business the founded invest their money, or should invest it. If I was a pro athlete who signed a $100M contract, is there a better move than taking the excess after a nice but not outrageous lifestyle and put it in the same few Vanguard funds I have now?

Actually I do like the ideas that some had in the other thread to invest in things that would create local jobs. Seems tough to do that and stay anonymous though.

A lot of reason people like Zuckerberg set up trusts or special accounts for charitable giving is for tax avoidance. I don't think there's any way to avoid the income taxes on lottery winnings, so you'd have full basis on the investments. Future income off those investments would be taxed, and maybe it'd be better to have that shielded, I guess.

I suppose I'd want to write off a huge amount to charity to offset the winnings, but probably wouldn't know where to direct the money in the same tax year so maybe setting up a foundation would be the way to handle that. I think that would get the write-off while letting me direct it to charities over time.

So certainly I would want to get some good legal and tax advice, and protecting myself from liability suits is a really good point. Maybe that's why a trust or LLC is the way to go.
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Old 01-09-2016, 12:51 PM   #6
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Originally Posted by hnzw_rui View Post
This makes for interesting reading.

Lucky You!
Advice To Instant Lottery Millionaires!


Key point: remain anonymous.
That's a great article. I like the name changing advice, then back to your birth name. It still shows you what a headache it'd be. Certainly worth the effort to stay anonymous, but I worry about a leak from the office of whoever I'd hire.

Also, the point that you'd have to gradually improve your lifestyle kind of negates the point of playing the lottery. I mean, if you had $100M and none of those concerns of people coming after your money, you could buy a luxury house, fancy cars, travel everywhere, help all of your family and friends out, etc. But instead, the advice (and good advice it is) is to live a little nicer without drawing attention, which means only spending a small piece of the money. So why bother with the lottery at all?

As someone already FIREd, I could probably do it more easily than most, but that's because I don't care to improve my lifestyle that much anyway. People don't need to know that I'm flying first class or staying in a very nice place, or even going to Tahiti rather than a nearby beach. And I could tell family that my investments continue to do well so I'd like to share a bit of the wealth with them and gift them somewhere in the $1K-$14K limit per year. But for someone barely making ends meet, just retiring in a few months is quite a stretch, even with the cover story in that article, on top of an upgraded house and car. Family and friends might start to ask a lot of questions unless you really do it very gradually.
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Old 01-09-2016, 12:53 PM   #7
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Originally Posted by hnzw_rui View Post
This makes for interesting reading.

Lucky You!
Advice To Instant Lottery Millionaires!


Key point: remain anonymous.
That was an interesting read. I would definitely follow some/all of the steps - starting with not cashing in right away and putting it in a safe deposit box while I consulted a lawyer.
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Old 01-09-2016, 01:01 PM   #8
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Originally Posted by hnzw_rui View Post
This makes for interesting reading.

Lucky You!
Advice To Instant Lottery Millionaires!


Key point: remain anonymous.
Now I have another reason to not play the lottery: I might WIN!
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Old 01-09-2016, 01:02 PM   #9
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I'd also get a good CPA and lawyer.
I'd give away much of it to charities, give a few EVs as gifts to friends, pay for a few college scholarships.
Probably enter into a partnership with Habitat for Humanity to build more Net Zero homes.
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Old 01-09-2016, 01:32 PM   #10
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Originally Posted by hnzw_rui View Post
This makes for interesting reading.

Lucky You!
Advice To Instant Lottery Millionaires!


Key point: remain anonymous.
This was interesting, but a legal name change seems like a royal PITA. Do you just change your name, drivers license, and SS card? What about all your financial accounts, broker, 401k, current employer (if your still working). Do you change your name for the 90+ days, yet still w*rk under your old name? Change your name to John Doe but still get vangard statements for Ronnieboy? Wonder how that would work...?

I would change my name to Pat and get the extreme makeover so they couldn't tell if I was male or female

I always wondered about states where you could remain anonymous, I guess that is only guaranteed if you can trust the employees at the lottery office to not leak info.
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Old 01-09-2016, 01:51 PM   #11
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This makes for interesting reading.

Lucky You!
Advice To Instant Lottery Millionaires!


Key point: remain anonymous.

Christ, after scanning this story, they can keep the money. That is one paranoid driven article. Gorilla suits are the least of it... change your name...


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Old 01-09-2016, 01:56 PM   #12
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I would only change enough info as needed to collect the money and satisfy the IRS and SSA. Sounds like you only need the DL for photo ID with new name and SS# with new name for reporting the income. Can't be that bad. People who change their name for marriage do it. I wouldn't change anything else. I don't see why it would be needed. Who would really care that Ronnieboy wasn't your real name for 3 months?

You'd have to hope that the SS# wasn't leaked or someone didn't have a way to trace your old name to it. Would the other name show up in a credit report somehow? You wouldn't be able to open any accounts at all under the temporary name.
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Old 01-09-2016, 01:56 PM   #13
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So certainly I would want to get some good legal and tax advice, and protecting myself from liability suits is a really good point. Maybe that's why a trust or LLC is the way to go.
Yup, better protection from people coming out of the woodwork if your assets are tied up in a trust.

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Also, the point that you'd have to gradually improve your lifestyle kind of negates the point of playing the lottery. I mean, if you had $100M and none of those concerns of people coming after your money, you could buy a luxury house, fancy cars, travel everywhere, help all of your family and friends out, etc. But instead, the advice (and good advice it is) is to live a little nicer without drawing attention, which means only spending a small piece of the money. So why bother with the lottery at all?
That's all well and good if you actually clear $100M after tax but the advice was more generic and also applies to those who win "just" $10M (around how much pre-tax lump sum would be if the current pot was split 50-ways e.g. work/group buy).

A lot of times, people win 7- or low 8-figures but they start spending like billionaire Arabian oil sheikhs. If you win $10M then buy an $8M luxury house, the remaining amount will probably just be eaten up by property taxes. For someone making minimum wage, even $1M may seem like a veritable fortune and would start spending like crazy only to file for bankruptcy in a year or two. I was actually reading an article about lottery winners who ended up filing for bankruptcy (or worse) and that's where I got the link for the above article.

Here at E-R.org, we know $1M is nowhere near enough if you've got an annual spend of $80K and 50+ years of retirement. Folks here also tend to be a lot more grounded when it comes to money and likely err too much on the conservative side so I reckon the advice to make the lifestyle increase gradual is unnecessary. Financial advisors? Pfft, I think that's one thing most folks here steer clear of. Really, I've seen plenty of knowledge in the forums to think most here would probably pass the CFP exam without needing to take a course.
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Old 01-09-2016, 01:59 PM   #14
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I always wondered about states where you could remain anonymous, I guess that is only guaranteed if you can trust the employees at the lottery office to not leak info.
I remember one, long ago, in MD where the winner can remain anonymous, one chose to do so, and apparently there were no leaks. There was a bit of a fuss in the newspapers and letters to the editor and such about the anonymous bit but I don't remember anything coming of it.

DW did buy a ticket when she was out, I explained the odds are better with an asteroid. Actually, with a pot that large I'd almost prefer not to win it. Almost, but not quite. After the first few million I doubt there'd be any change in lifestyle for us anyway.

But yes, I'd make a beeline for the lawyer and the (fee only) FA. B&H Photo and Adorama Camera would love me. Lots of giving to charities, most of them local. A retired sheriff locally won many millions a few years ago and he's done a lot of local charity giving, including I think a new gym for a local high school. That's kind of neat.
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Old 01-09-2016, 02:08 PM   #15
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I would only change enough info as needed to collect the money and satisfy the IRS and SSA. Sounds like you only need the DL for photo ID with new name and SS# with new name for reporting the income. Can't be that bad. People who change their name for marriage do it. I wouldn't change anything else. I don't see why it would be needed. Who would really care that Ronnieboy wasn't your real name for 3 months?

You'd have to hope that the SS# wasn't leaked or someone didn't have a way to trace your old name to it. Would the other name show up in a credit report somehow? You wouldn't be able to open any accounts at all under the temporary name.
If you change your name, do you get a new SS#? I believe it is your current one with new name, so there is always a link between both names and same SS#. I guess you would file your 1040 under whatever name you are using at that time. I better start thinking of some good new names....'Richard Cranium', 'Rick Richards', 'Semour Butts'. I'll have to watch some Simpsons to see what Bart comes up with.
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Old 01-09-2016, 02:19 PM   #16
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Yup, better protection from people coming out of the woodwork if your assets are tied up in a trust.


That's all well and good if you actually clear $100M after tax but the advice was more generic and also applies to those who win "just" $10M (around how much pre-tax lump sum would be if the current pot was split 50-ways e.g. work/group buy).

A lot of times, people win 7- or low 8-figures but they start spending like billionaire Arabian oil sheikhs. If you win $10M then buy an $8M luxury house, the remaining amount will probably just be eaten up by property taxes. For someone making minimum wage, even $1M may seem like a veritable fortune and would start spending like crazy only to file for bankruptcy in a year or two. I was actually reading an article about lottery winners who ended up filing for bankruptcy (or worse) and that's where I got the link for the above article.

Here at E-R.org, we know $1M is nowhere near enough if you've got an annual spend of $80K and 50+ years of retirement. Folks here also tend to be a lot more grounded when it comes to money and likely err too much on the conservative side so I reckon the advice to make the lifestyle increase gradual is unnecessary. Financial advisors? Pfft, I think that's one thing most folks here steer clear of. Really, I've seen plenty of knowledge in the forums to think most here would probably pass the CFP exam without needing to take a course.
The OP talked about winning the whole enchilada, winning $495M so I assumed the question wasn't about winning "just" $10M. You're right about the article being more generic and for smaller amounts, and for $10M that could work as a viable plan for laying low, and also managing the money wisely without feeling you weren't taking any advantage of having that fortune. I probably wouldn't want to get more than $10-25M, so if I won more I'd probably give the rest away, and if it did get tracked to me I could say that most of it was gone so leave me alone.

I was also answering the question of what I would do, (hopefully) knowing how to manage it well. I think someone prone to splurging and blowing their fortune isn't likely to have the discipline to lay low for very long and bump up their life style slowly without being spotted. If I had won 20some years ago, living paycheck to paycheck and coming off a divorce, I'd have had to stay working for quite awhile to stay off everyone's radar. I guess I would've invented some stories about investing a small amount in a stock that soared, selling that for the next big gainer, and so on until I had enough to quit. Being divorced with child support would always put me at risk for having my tax returns made available.
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Old 01-09-2016, 02:29 PM   #17
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Old 01-09-2016, 02:41 PM   #18
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For privacy purposes a common name would be more useful. "I'm John Smith, feel free to locate me via the interwebs."
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Old 01-09-2016, 02:45 PM   #19
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Christ, after scanning this story, they can keep the money. That is one paranoid driven article. Gorilla suits are the least of it... change your name...
You really think that's being paranoid? I think it'd be a nightmare to have the world know you won many millions of $. It's not really paranoia if it's true, is it? This is why I don't plan to buy a ticket, but if for some reason I did, I would most definitely go through these steps to try to hide it.
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Old 01-09-2016, 03:02 PM   #20
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I probably wouldn't want to get more than $10-25M, so if I won more I'd probably give the rest away, and if it did get tracked to me I could say that most of it was gone so leave me alone.
Lol, same. Just keep $10-20M in a trust. Maybe use part of the funds to get some SPIAs for income stream in case I become senile or just to ensure I wouldn't have to work at Walmart for minimum wage. Probably give a large chunk to charity right off the bat since a lot of it's gonna go to taxes otherwise anyway. Set up trusts for special needs relatives and college funds for niblings. Either a one-time gift of $14K (or whatever the gift tax exclusion limit is) or annual Christmas gifts of $1-2K each to some extended relatives (depending on how likely they are to blow off the money quickly).
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