By Nathan Vinson, Attorney
English, Lucas, Priest and Owsley
We all would love a nice windfall of unexpected money. Whether that’s winning the lottery, receiving an inheritance or taking home a fat prize from a TV quiz show, it’s nice to think about what we might do with sudden wealth that we didn’t really do much to earn, and comes in a large lump sum.
In the case of lottery or quiz show winners, the first thing you want to do is tell everyone because you are excited. But that’s a mistake – a big one. When people know that you have an unexpected amount of cash coming your way, people you haven’t heard from in years will ask you for money. Also expect that your everyday friends may ask for money – and it may surprise you who makes that ask. Then comes the charities and those who represent those organizations.
Chances are, you’ll be hit with so many opportunities to give away your fortune that it will be overwhelming. Some may be incredibly persistent, and you may want to write a check to make them go away. Don’t do that. Don’t give anyone money until you’ve gotten your check, have met with a competent and trusted financial advisor, attorney or other professional adviser and made comprehensive plans for the future.
In the most recent news of a Powerball winner, John and Lisa Robinson of Munford, Tenn., learned they had hit the jackpot, splitting a $1.58 billion-dollar Powerball pot with two other families. Their share of winnings was $528.8 million, and they chose the lump sum payment of $327 million.
To put this in Bowling Green, Kentucky, terms, that’s 5,450 new Corvettes, with the average new Vette costing around $60,000. Note: we are not suggesting they, or anyone else with millions, buy 5,000 new cars.
What’s unusual about their case is that they chose to contact The Today Show and fly to New York for an appearance with the uncashed lottery ticket in John’s pocket.
For many obvious reasons, this is a bad idea. Lose the ticket? No jackpot for you. This move put the family in the national spotlight. Within a few days, they were begging for privacy, but it was too late. Once you’ve made it public, those with their own agendas will find you, and it will shock you how bold and widespread the asks are.
The lesson here is keep your finances private. You do need a trusted advisor to help you, and you should definitely hire a professional to help you vet the many decisions that are coming your way.
Even if you inherit a much more modest amount – $100,000 or less – making strategic decisions about this much smaller windfall can make a big difference in the life of your family. You may want to pay for a college education (ok, only part of one these days) for a child or grandchild with that money. You may want to save it for retirement, or spend it on a great trip. A financial advisor can talk you through how to keep it from being eaten by taxes.
Call me, attorney Nathan Vinson, at (270) 781-6500 if you need assistance with tax law. Contact attorney Beth McKinney at (270) 781-6500 or firstname.lastname@example.org if you need assistance with wills, trusts or probate. We will be glad to talk to you.