It really did turn out to be your lucky day. Whether you bought a physical ticket or played an online lottery game, you actually won money playing the lottery! But what are the next steps when you win the lottery, especially when it comes to six, seven or eight-figure prizes?
After the first wave of celebration subsides, you will have questions about your instant fortune. It doesn’t matter if it’s a mind-boggling Powerball jackpot, Mega Millions or another smaller victory.
A life-changing amount of money calls for sound decision-making and guidance from professionals. When you win the lottery, it can make you a target for scams and possible lawsuits. Because of this, it is important to consider hiring a lawyer.
After the excitement and shock of holding the winning ticket, selecting a lawyer and asking the right questions can be overwhelming. Eric Pritchard, a Philadelphia-based attorney at FisherBroyles, lends more than 30 years of expertise on the subject.
What should you do after you win the lottery?
Pritchard advises taking adequate steps to protect the winning ticket and your anonymity. You should put the ticket in a safe deposit box, if possible. Pritchard also recommends limiting the number of people who know you won.
Hire the right lawyer after your lottery win
There are few “lottery lawyers” for the simple reason; there aren’t enough potential clients winning lotteries.
However, what should such clients look for when choosing a lawyer after they win a considerable amount of money?
“What you don’t want to do is to hire a lawyer who even suggests that he takes a percentage of your winnings. If that’s the approach the lawyer takes, find another lawyer immediately,” said Pritchard.
“Here’s a dirty little secret I learned as a young lawyer: Clients and potential clients rarely know who the good lawyers really are simply because clients can’t see behind the curtain. If you win the lottery and want good legal representation, interview multiple lawyers and don’t be afraid to ask good questions.”
Questions to ask potential lottery lawyers:
- What experience do you have in this area of the law?
- Have you represented other clients with similar legal needs? If so, how did the representation turn out?
- Can I speak with a client/former client for a reference?
- What do you think my legal needs are now that I’ve hit the jackpot?
- What is your hourly rate?
- Who else in your office will work on this matter? What will they do and what is their hourly rate?
- Can any of the work be done on a flat fee? If so, what work is necessary?
Pritchard also recommends interviewing more than one or two candidates.
“Don’t be afraid to ask tough questions. It’s your money and lawyers are expensive. Make sure to stand up for yourself. This is an important decision. Be thorough.”
Research to do before hiring a lawyer:
- Google the lawyer before you call and see what information is available.
- Check with the state’s licensing authority. Has the lawyer ever been disciplined? Many state licensing authorities now maintain an online database of lawyers and their disciplinary records.
Trust, personality matters when choosing a lawyer
Pritchard brings up another point before engaging counsel; make sure you like the lawyer, feel they are trustworthy and has your best interests at heart. After all, you will be working closely with this person during a pressure-packed period of time.
“If there’s any question in your mind, trust yourself and move on. There are plenty of good lawyers out there. And plenty of bad ones, too. Be vigilant.”
What lottery win amount calls for hiring a lawyer?
Obviously, Powerball jackpots call for legal counsel. But what about other wins? Is there a certain number that should trigger a call to an attorney?
Here’s what Pritchard says:
“There’s no magic number for deciding when you should hire a lawyer. You may have greater legal needs at $1 million than someone else may have at $10 million. A good lawyer will pay for their fee several times over just because lawyers often know where many of the potholes may be and how best to avoid them. If you hit it big, winning millions of dollars, you should hire a good lawyer promptly. A good lawyer can prove to be invaluable in terms or helping you navigate the process of claiming the prize and helping you decide how you want to work your way through the ‘winnings’ process.”
A windfall of a large amount of money is most likely going to be the most important financial moment of a person’s life, and possibly the lives of children and grandchildren.
“It can be difficult to navigate these sorts of situations if you haven’t been through them before. Don’t underestimate knowledge, experience, foresight and independence a good lawyer brings.”
Other things to consider before retaining an attorney for a lottery win:
- Are you concerned that others may try to claim a portion of the prize money?
- Will long-lost “zombie” relatives show up looking to take as much of your winnings out of your hands as possible?
- Will/is everybody now asking you for money?
- How can you limit your taxes from your lottery winnings?
Protective measures from scams and frivolous lawsuits
Winning the lottery should be a happy time. So, it might be especially hard for you to say “no.”
Pritchard explains that a good lawyer knows how to say “no” and make it stick. Also, they are a “shield” for clients.
“When I represent my clients, I often serve as the ‘bad cop,’ telling the other side what the client will or will not agree to and why. Blaming it on the lawyer is an age-old strategy. That’s what we are here for. Let your lawyer earn her fee. Others can get angry at the lawyer, not you.”
About your lottery winnings
When you win a large sum of money, a qualified attorney and other professionals can help provide you with various options to address a number of issues.
The key questions about lottery winnings surround the best ways to preserve winnings:
- Annuity or lump sum payment (Pritchard says, “Cash is king!”)?
- What are your best investment strategies?
- What steps are necessary to ensure your heirs are taken care of?
- Should you set up a trust or a business to protect your assets?
- Can you claim the prize without being required to participate in a lottery news conference? Should you participate in the news conference? (Pritchard poses this question, “What is the upside of parading in front of cameras?)
Competent counsel will be able to advise you on the legal impact as you navigate the process of winning the lottery.
You might need more than a lawyer
A qualified lawyer isn’t the only professional you will need after winning the lottery. However, an experienced lawyer should have a network of other top-quality professionals such as accountants, investment advisors and even security. All of whom can work with your lawyer to protect the client’s interests.
“You should assemble a top-flight team of professionals who can advise you and help you get through the winnings process. A good lawyer will protect you and your family from others interested in getting your money.”