Newswise — GAINESVILLE, Fla. --- After crying tears of joy or screaming with sheer delight, University of Florida financial expert Michael Gutter said the winner – or winners – of this week’s $1.5 billion Powerball should be prepared and also discreet.
“First off, secure yourself, secure your family – don’t broadcast that you’ve won,” said Gutter, associate dean for the UF Institute of Food and Agricultural Sciences Extension and state program leader for 4-H Youth Development, Families & Communities.
After that – and before you claim your winnings - he said the winner should assemble a team of trusted advisors, including a financial planner, an attorney to set up a living trust and an accountant to help with tax issues.
“Something this complicated is going to have a lot of moving parts,” Gutter said. “Really putting together a cohesive team that understands your family, your family’s values, the things you’re trying to accomplish, could be a critical piece to really making any windfall be of great benefit to your family.” Your next step is going to be whether to take an annual payment or one lump-sum payment. An annuity will require a little more planning to accomplish your goals and putting off major projects until you have saved enough money – which is true in any financial situation. If you take the lump sum, be prepared to take a lower payout of about $930 million and after that pay nearly 40 percent to Uncle Sam, who will want the government’s share in taxes.
“If it were me, I’d want to give away a substantial portion of that,” he said. “So I’d want to do that all at once where I’d know I could maybe make a big difference.”
As for buying big ticket items, Gutter said to gauge whether or not you want to, for instance, buy a private island or just visit one.
“How do these things further the values of the family? So for example, ‘Is this something I want temporary access to because you think this would be a fun experience, but this isn’t a part of our lifestyle? Or is this part of a lifestyle that I want to have?’” he asked. “Let’s say another thing the family values is being out on the ocean, maybe spending quality family time together. So maybe you invest in a boat because it’s something that you know fulfills your family’s core values.”
Gutter cautioned against buying things just because you can.
“That’s a good way to go through a lot of money very quickly – and then you have nothing to show for it,” he said.
And for all the rest of us who don’t win? Don’t give up on your dreams.
“It gets us thinking about things that excite us and things that maybe are there, but what I think it often ought to do is give us a little bit of a spark,” Gutter said. “Some of these things are obtainable – maybe not immediately with an overnight windfall, but with a couple of years of hard work, maybe that family trip that you really were excited about could happen.”
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By Kimberly Moore Wilmoth, 352-294-3302, email@example.com
Sources: Michael Gutter, 352-392-1761, firstname.lastname@example.org