Financial advisor for lottery winners: what you should know
When you suddenly come into a large sum of money, you’ll need a financial plan ASAP. Here’s what to know and what to do as a lottery winner.
Summary
A financial advisor can help you create a plan for your winnings to help it last.
Financial advisors can help with the different facets you’ll encounter as a lottery winner, including taxes, investment strategies, estate planning, large purchases, insurance, charitable giving, and more.
An expert can ease your mind about your finances by creating a personalized financial plan.
Unbiased can connect you with a financial advisor who can give you the advice you need.
Should I get a financial advisor if I win the lottery?
Winning the lottery is the most exhilarating experience of your life.
However, with it comes a lot of overwhelming decisions, one of the most urgent of which is whether or not you should get a financial advisor.
It’s no secret that money goes fast for many lottery winners, but many lottery winners also come up with a financial plan to benefit their families for years.
A good financial advisor can help you plan for everything that’s thrown at you as a new lottery winner.
Whether that’s choosing a lump sum or an annuity from the get-go, planning for taxes, making big purchases, choosing investments, or building an estate plan, there’s a lot that you’ll need help with. An expert to walk you through your options will help bring peace of mind that your money will last.
How can a financial advisor help lottery winners?
Financial advisors see the whole picture.
A good one can help you navigate all the new twists and turns as a new lottery winner. Though this list isn’t comprehensive, financial advisors can help in the following ways:
Annuity or lump sum: Lottery winnings are often offered as either a lump sum or an annuity. With a lump sum, the money is yours upfront, but you’ll have greater tax consequences. With an annuity, you’re promised a certain amount of money each year. A financial advisor can help you make this decision.
Taxes: After winning the lottery, you’ll want advice on taxes first. Find a financial advisor who specializes in tax planning. They’ll be able to give you guidance on tax law to keep as much of your winnings as you can.
Charitable giving: When you win the lottery, it’s natural to want to give some of it away. A financial advisor can help guide you into the appropriate amounts without compromising your financial situation, either now or in the future.
Investment strategies: To make your money last, nvesting a large lump sum from lottery winnings can help produce income for you to live on for the rest of your life. You can talk about the different types of investments, such as real estate or stock. You’ll also discuss where to hold your money, including money market accounts, retirement accounts, brokerage accounts, and more.
Estate planning: Lottery winners often want to pass on money to their families, this is where estate planning becomes essential. Financial advisors can help steer you in the right direction.
Large purchases: With a lot of money in your pocket, it becomes too easy to want to spend on things you’ve never had. A financial advisor is immensely helpful in laying out a complete plan so you know how much fun money you can spend without compromising your financial future. Whether you buy a house, a car, or a business, their advice can prove invaluable.
Insurance: You’ll want to update your insurance policies, especially when it comes to your homeowners, life, and umbrella insurance policies.
Legal: Though a financial advisor isn’t an attorney, they’ll understand it’s part of the plan. They may be able to refer you to someone who can help put plans in place to protect your assets.
Pay off debt: Financial advisors can give advice on paying off debt when you come into a large amount of money. You might want to pay off everything, but a financial advisor can help you see the consequences. In some instances, for example, it might make sense to keep a mortgage.
What should I look for in a financial advisor as a lottery winner?
Technically, there’s no difference between a financial advisor for a lottery winner and a financial advisor for other clients.
Some might advertise themselves as high-net-worth advisors, but their skill set is very similar.
Some good qualities in a financial advisor that you’ll want to look for include:
Fiduciary: A financial advisor who is a fiduciary is required to put your interests above their own. When you have lottery winnings that need to be managed, it’s important to hire a financial advisor whose recommendations are not motivated by commissions.
Unbiased: When you win the lottery, all kinds of people will want to “help” you. It’ll be tough to say no to a relative who wants to manage your finances, but your uncle Bob or that nice guy from church may not have the expertise, or even your best interest at heart. It’s crucial to find an unbiased expert to help you with your money.
Comprehensive: You’ll have a lot of different financial elements to take care of as a lottery winner. A good financial advisor can help you take care of many aspects of your finances.
Experienced: When you win the lottery, your financial picture changes quickly. It’s helpful to hire a financial advisor who has experience with high-net-worth individuals and those who suddenly have access to a large sum of money.
Credentialed: It’s also important to look for credentials. A CFP, for example, is a high standard for a financial advisor. You can check their credentials on the FINRA BrokerCheck website, which has information about the advisor’s registration status, complaints, regulatory action, and other basic information.
Communicative: It’s important to find a financial advisor who can spend a lot of time with you and respond to your questions. You’ll have a lot, and a good financial advisor can help guide you through every obstacle.
Who are the best financial advisors for lottery winners?
When it comes down to it, the best financial advisors for lottery winners are competent, caring, and ethical.
They can empower you with a financial plan that will give you peace of mind for years to come. Be on the lookout for a financial advisor who is a fiduciary. Interview several, and choose one that works for you.
Get expert financial advice
The price of a financial advisor is small compared to how valuable the planning and preservation of your lottery winnings are.
Get started on the right track as soon as you're able.
Unbiased can connect you to professional financial advisors who look out for your needs.
Content Writer
Alene Laney is an award-winning journalist for Unbiased, where she breaks down financial topics related to retirement, investing, and banking. She specializes in helping readers make the best decisions for their money with long-form content for brands and consumer publications.