The Mega Millions lottery recently reached $1 billion, which is the second-largest grand prize in history. Strangely, statistics reveal that lottery winners are more likely to declare bankruptcy than other Americans. If you have come into a windfall from winning the lottery or inheriting from a relative, you need to exercise care when managing this money. Consider the following tips to help manage your funds now and plan for supporting your loved ones after your death.
With the exception of your friends and family, you should avoid sharing details about the amount that you received to the world. By planning ahead, you can make sure to keep a low profile and avoid becoming visible to creditors and others who might try to assert an interest in your money.
Avoid Going Alone
Managing a large amount of money is a big responsibility, which is why it is recommended that you enlist the assistance of professionals like a financial planner, an accountant, and an estate planning attorney.
Update Your Estate Planning Document
Receiving a large amount of money might seem like a wonderful stroke of luck, but the reality is that more money often brings with it a host of complications. Many people find themselves facing sobering tax ramifications. These people need the assistance of an experienced estate planning attorney who can help determine various strategies to protect their money now and after their passing. An estate planning attorney will also make certain that you properly update your existing estate planning documents, including your will, to reflect your newfound wealth.
Do Not be Careless
A large inheritance or lottery winning may be a great deal of money, but you still need to be responsible in handling it. Consider placing some of it in a high-interest earning savings account or a retirement account like a 401(k). Some people also decide to cautiously invest the money in the stock market. You may want to use some of it to pay off any debts that you have.
Speak with an Experienced Estate Planning Lawyer
The estate planning process can be complicated, but it is important that it be done properly to avoid making any costly mistakes. If you have questions about the process or how a recent inheritance will impact your estate plan, do not hesitate to contact Resnick Law today to schedule an initial free consultation.
(image courtesy of Sharon McCutcheon)