What to do if you get really lucky.

The odds of winning the lottery are slim to none, but that doesn’t deter millions of Americans from spending, on average, about $70 billion a year on lottery tickets— approximately $230 per capita, including children. (1)

In 2022, players across the United States surpassed that average, spending more than $107.8 billion on lotteries, according to the North American Association of State and Provincial Lotteries (NASPL). Florida led the country with $9.3 billion in sales, followed by
California with sales of $8.9 billion. (1)

States benefit from lotteries, but do you?

Occasionally, someone wins big-time, but most people win nothing. The biggest lottery winners may be state governments. (1) SmartAsset reported in late 2022 that 11 states received higher revenues from lottery tickets than they did from corporate taxes.

Negative returns on our own lottery “investments” aren’t much of an incentive, but hearing stories about huge prizes and the occasional random winner nudges many of us to buy tickets and test our own luck—usually with little or no results. An example is the widely broadcast story in early 2023 about a formerly homeless woman who won $5 million with a scratch off ticket purchased at a California Walmart.

Cautionary steps – and what to do if you win

You may not win, but you can dream. The first step you should take after you buy your ticket is to sign the back. This will help prevent someone else from claiming to be the winner if you lose your ticket (and they find it) or it’s stolen—and then declared a winner.

If you’re lucky and win a lottery jackpot, take these precautions:

ƒ Consider making a tax-deductible gift to your library.

ƒ Choose anonymity if your state allows it. If your name makes it into the news, you’re likely to be slammed with financial requests from charities, relatives, friends, potential scammers and more.

ƒ Carefully handpick an attorney, certified public accountant, and investment advisor to work with you (and each other) to help you make legal and financial decisions that support your goals and work in your best interest.

ƒ Before you cash in your ticket, consult with your accountant or tax professional to help you decide whether to take the prize money all at once, or stretch it out over 20-30 years in annuity payments. If you choose the lump-sum payment, the amount you receive will be lower than the aggregate of the annuity payments.

ƒ Talk to your attorney to determine if you should consider placing your winnings in a trust or other estate-planning option.

ƒ Pay off your debts, so you’ll be earning interest, instead of paying it.

ƒ Invest prudently.

ƒ Create a budget—and stick to it.

ƒ Take steps to protect your assets from creditors, ex-spouses, disgruntled family members, and others who might be looking for excuses to sue you now that you’ve won the lottery.

ƒ Avoid temptations, such as sudden lifestyle changes and purchases. Don’t suddenly quit your job or buy a mansion, for example. There have been a lot of “riches to rags” stories about lottery winners who went bankrupt. (2)

ƒ Consider charitable giving options to offset your winnings.

ƒ Review your estate plan, and talk with your lawyer and financial advisor about any changes you may want to consider.

ƒ Be cautious

ƒ Even if news organizations don’t reveal the names of lottery winners, their identities are often leaked by friends, family members, and neighbors who share their happy story. Be aware that your winnings could make you a target of scammers or others who want a share of your winnings. Be safe, be smart, and be prepared.


Thanks for checking out the blog. 

Joe Breslin , CFP®



(1) SmartAsset: The Economics of the Lottery in the U.S., Oct. 1, 2022

(2) Fortune: You could still go bankrupt even if you win the $2 billion Powerball jackpot, Nov. 8, 2022

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive  outcomes. Investing involves risks including possible loss of principal.

This material was prepared by LPL Financial.   Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and
broker-dealer (member FINRA/SIPC). 

Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.

Securities and insurance offered through LPL or its affiliates are:


Share This Article


You May Also Like

Asset Protection in Estate Planning

You’re beginning to accumulate substantial wealth, but you worry about protecting it from future potential creditors. Whether your concern is for your personal assets or your business, various tools exist to keep your property safe from tax collectors, accident victims, health-care providers, credit card issuers, business creditors, and creditors of others.

Read More »

Estate Planning: An Introduction

What estate planning means to you specifically depends on who you are. Your age, health, wealth, lifestyle, life stage, goals, and many other factors determine your particular estate planning needs.

Read More »

Taking Advantage of Employer-Sponsored Retirement Plans

Employer-sponsored qualified retirement plans such as 401(k)s are some of the most powerful retirement savings tools available. If your employer offers such a plan and you’re not participating in it, you should be. Once you’re participating in a plan, try to take full advantage of it.

Read More »

Properly Insuring Your Business

No matter how careful you are in running your business, accidents happen. And no matter how big or small your business, you’ll have to plan for these and other risks if you want your business to thrive. One way to do this is with insurance.

Read More »

Funding a Buy-Sell Agreement with Life Insurance

As a partner or co-owner (private shareholder) of a business, you’ve spent years building a valuable financial interest in your company. You may have considered setting up a buy-sell agreement to ensure your surviving family a smooth sale of your business interest and are looking into funding methods. One of the first methods you should consider is life insurance.

Read More »

Transferring Your Family Business

As a business owner, you’re going to have to decide when will be the right time to step out of the family business and how you’ll do it. There are many estate planning tools you can use to transfer your business. Selecting the right one will depend on whether you plan to retire from the business or keep it until you die.

Read More »

Don't Miss Anything

Stay up to date with our monthly newsletter.