You've Won the Lottery. Now What?

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Daydreaming about winning the lottery is amazing. In fantasizing, we think about spending our winnings. Considering whether you would buy a castle or travel around the world first become real debates. But if your lottery fantasies do become a reality, you'll need to take care of a few things before you start the spending spree.

Your heart is pounding; you can hardly believe your eyes. You keep rechecking the lottery results in the Sunday morning newspaper, and they seem to match the numbers on your ticket. It's amazing! Now you're rich and can run right out and buy anything you want. Maybe that new Ferrari you saw in your automotive magazine. Or a mansion on a golf course. Or maybe a private jet that will fly you to your very own island!

Not so fast.

Daydreaming about winning the lottery is amazing. In fantasizing, we think about spending our winnings. Considering whether you would buy a castle or travel around the world first become real debates. But if your lottery fantasies do become a reality, you'll need to take care of a few things before you start the spending spree.

Wait. Most experts advise waiting a few days before you claim your prize. In the meantime, ask for a little time off from work. You probably don't want to quit your job until the lottery money is nestled in your bank account.

Locate a Financial Advisor. The most crucial step is to find a financial advisor. This person could be a lawyer, financial planner or CPA. Depending on the size of your haul, you may end up needing more than one advisor. But the first one can get you started. Your new financial advisor can recommend what steps you should take, such as establishing a trust, before claiming your winnings. Consult with him or her to decide whether to collect the money in a lump sum or installments. Later on, work with your advisor to develop a realistic spending strategy so you don't end up going from glamour to gutter.

To find a good advisor, you may want to check with your friends and family. Make sure the advisor can handle issues related to lottery winnings. He or she should have experience working with individuals who have net worth similar to yours. Check for any complaints with the appropriate licensing agency. For example, inquire with the state bar association if your prospective advisor is an attorney. Finally, make sure you feel comfortable with this person. You don't need to work with someone who rushes you, talks down to you, or pushes you to take actions that you don't understand or feel comfortable with.

Obtain an Unlisted Telephone Number. Until your unlisted number is activated, ask friends, family and your financial advisor to call you on a cell phone. The unlisted number is crucial for several reasons. Most lotteries release the names and locations of winners. This means that you will be bombarded with calls from charities asking for contributions, not to mention long-lost family members looking to "borrow" money.

Have your financial plan in place before you start giving away money. You'll also want your advisor to screen charities to make sure they're legitimate. Having the unlisted telephone number will give you some breathing room to make financial decision thoughtfully, rather than under pressure from aggressive callers. Be sure to use the same approach with your loved ones. Don't make grand promises in the heat of the moment. Instead, wait until you've had time to talk with your advisor and get a sense of your true financial situation.

Collect Your Money and Celebrate. Now that you've lined up your financial advisor and made the first round of decisions, collect your money and celebrate. Whether that means a night out in a limo or a quiet celebration at home with friends and family, do what makes you happy.