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So here's a dream scenario.

After playing the lottery for years, your ship has finally come in as you win $1 million (or more) playing the lottery.

Your first reaction is disbelief and your second one is pure elation. You check your numbers once, twice and thrice and yes, your win is legit and you raise a glass to celebrate.

Sooner or later, though, you're going to have to figure out just how you're going to play your lottery win.

After all, you don't want to wind up like one of those lottery winners who make rash (okay, dumb) decisions like not remaining anonymous or not working with a trusted financial planner before cashing in on their lottery tickets.

Those are the lottery victors that academics talk about when they say lottery winners are more likely to declare bankruptcy than non-winners and that winning the lottery and squandering the money leaves winners depressed and unsatisfied.

Hey, that's what can happen when you cash in a winning lottery ticket, temporarily join the top 1% of income earners, and fall off the cliff financially after making bad post-lottery decisions.

Don't let that happen to you. Take these positive action steps when you win the lottery and learn not only how to keep your new-found growth, but make it grow for the long haul.

What to Do if You Win the Lottery: 7 Steps 

1. Take Your Winning Lottery Ticket and Sign It

Verify that you are the owner of the winning lottery ticket by signing it immediately (sign it on the back of the ticket). Keep it in a safe place - a bank safe deposit box will work, as will a home safe. The goal here is to secure your winning ticket and have it at your disposal when you need it.

2. Keep a Sharp Eye on the Clock 

Most lotteries have an expiration date for winning tickets, and it's up to you to know those expiration dates. There's no immediate threat of turning your ticket in before it expires, as most state lottery expiration dates are months or even a year after the lottery is over. Still, know that date cold as you prepare your financial plan before turning in your winning ticket.

3. Get Working With a Good and Trusted Financial Planner 

Let's face facts, if you have a health issue you go to a doctor. If you have an engine problem you take your vehicle to a mechanic. So, if you have a $1 million windfall drop in your lap and you don't know what to do, you take it to a professional money manager.

A good wealth manager can walk you through the myriad issues tied to a winning lottery ticket, including taking the money in a lump sum versus a regular annuity payment every year, tax issues prevalent with lottery winnings, and how to manage your new-found wealth going forward.

If you don't already have a financial planner in your life, discreetly ask people you trust for references or visit the National Association of Personal Financial Advisors web site, which lists and vets good money managers for you.

4. Remain Anonymous 

Ask a previous lottery winner his or biggest regret and invariably it will be their decision to go public with their lottery win. As they found out, vanity and haste would cost them later, as long lines of prospective beneficiaries lined up to beg them for money, a handout, or a (likely dubious) business partnership.

Then there are the inevitable requests for loans and gifts from people you know and trust, including family members, friends, co-workers - even that guy who played on your softball team a decade ago.

The fact is that people will come crawling out of the woodwork looking for a handout once you go public as a lottery winner. It's much better to remain anonymous and remain in control over any financial moves you make with your windfall. You'll want to have flexibility over things like charitable donations, business and personal investments, and any cash loans or gifts you want to bestow on a friend or loved one - or just someone in need.

Remaining mum about your lottery gives you that control, and keeps you out of the limelight and away from prying eyes after you cash in on your lottery win.

5. Get Insurance

If you don't remain anonymous, you could be targeted by unscrupulous individuals or organizations that will hound you with nuisance lawsuits designed for one reason - to grab some of your new-found wealth.

That's why it's also a good idea to also hire an estate planning attorney, and insurance specialist, and even a good lawyer (for a reasonable retainer.) The idea here is to take every step needed to protect your assets from nuisance lawsuits and litigation-happy family members or business partners from trying to help themselves to your lottery cash.

6. Live Within Your Means 

Yes, you now have a great deal of money in your bank account - more than you've ever had in your life. Thus, it's tempting to spend that money, especially if you're worried that someone may take it away from you via lawsuit, by fraud, or by poor money management decisions that lead to your lottery winnings flying out the window.

Don't think like that. If you've followed the money management tips listed above, your money will be well-protected and insulated from fraudsters, pests and thieves.

With that reassurance, further protect your money by sticking to tried-and-true financial basics, like adhering to a household budget, making smart and stable investments, and having a good long-term financial plan designed to keep you wealthy not just for today, but for 20, 30 and 40 years down the road.

7. Don't Quit Your Job - Yet 

The question over quitting your job or not after winning the lottery is a valid one, based on unique characteristics. If you hate your job, for instance, leaving it is entirely understandable. After all, who needs the stress?

Or, if you won so much money in the lottery, i.e., millions of dollars, staying at a job you don't like, are indifferent about, or takes you away from your family and friends for 10 or 12 hours a day doesn't make sense - not when you have a load of cash in the bank.

The point is, making the decision to quit your job after winning the lottery is a unique one for your personal circumstances.

That's why it's so important to work with a good money manager to lay out a long-term financial plan that preserves your newly-found financial capital for decades to come. Having that plan in place makes it much easier to weigh the pros and cons - outside of income needs - of telling your company you're hitting the bricks.

Things You Should Know as a New Lottery Winner

As a newly-minted lottery champion, you'll likely also have many questions to ask. That's a natural occurrence for someone who's never experienced dealing with a new flood of cash pouring into your life.

These questions are likely a priority. Let's answer them and keep you, the new but likely under-informed lottery winner, in the know.

How Soon Can I Get My Money? 

That's basically up to you, as a lottery winner. Technically, you'll receive the money after you turn in the winning ticket - it can be deposited into your bank account in a matter of 24 to 48 hours in most state lotteries.

You may, however, hold off on being paid off until you've worked out a thorough financial plan that minimizes taxes and maximizes your total take-home pay. That means working with a financial adviser to lay that plan in place - a process that could take days or even weeks.

How Will I Be Paid? 

Most states give lottery winners the option of being paid via regular check or by electronic deposit. The latter is a more secure and faster way to get paid, although a good case can be made to be paid by either method.

How Much Will I Pay in Taxes?

Your state lottery agency will walk you through your tax obligations when you turn in your ticket and your winning numbers are verified.

Each state likely has a different tax rate, usually from 30% to 50%, depending on where you reside (the federal government will take its cut, too). Again, have an accountant or money manager lay out a plan first before you accept the money to minimize your lottery cash tax burden.

What if I Win a Lottery In a Different State? 

There's no law that says you can't play a lottery in a different state and win it. In fact, many lotteries are open to players in other U.S. states - it beefs up the number of players and the amount of money to be paid out to the lottery winners.

If you win as an out-of-state lottery victor, prepare to pay taxes based on the state where the lottery was held. You may have to pay taxes in your home state, too. But if you're lucky, you live in Texas, Florida, South Dakota, Wyoming, Washington, New Hampshire, and Tennessee - states with no state income taxes for residents.

Be a Smart Lottery Winner

To maximize your lottery winnings, take a deep breath or two, keep your head about you, resist the urge to spend it lavishly and immediately, and follow the tips listed above.

Do all that and your lottery winnings will be around for the long-term - for you and your loved ones to enjoy.

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