IN Upper St. Clair Spring 2016 | Page 17

INDUSTRY INSIGHT YOUR FINANCES SPONSORED CONTENT When You Win the Lottery 3 tips for turning sudden wealth into a lasting legacy “I ’d buy a hunting preserve.” “I would write children’s books.” “I’d hire a personal chef!” “I’d travel to every country I’ve ever wanted to see…and maybe buy a second home in the place I like the best.” A quick survey around the office yielded those responses to the question “What would you do if you won the lottery?” After the frenzy surrounding the $1.5 billion Powerball jackpot earlier this year, you likely already know that your odds of winning the lottery are slim – about 1 in 292 million. Still, the price of a ticket buys you a moment to dream, and to consider what you would do if you suddenly became a mega-millionaire – or billionaire. Coming into sudden wealth can be both thrilling and overwhelming, and we’ve all heard stories of winners who ended up broke just a few years after hitting it big. Here are our top three tips for turning sudden wealth into a lasting legacy. 1. Assemble a team of professionals. You’ll need a financial advisor to help you decide how to invest, an accountant to help determine the tax ramifications, and an attorney to handle your newly acquired estate planning concerns. We recommend hiring each professional independently, rather than accepting your financial advisor’s recommendation for an attorney, or your attorney’s recommendation for an accountant. Why? So that your team can act as checks and balances for each other – you can request your accountant’s opinion of the plan your financial advisor has put together, and get your attorney’s take on your accountant’s advice. Carefully evaluate each professional’s experience, record of complaints from past clients and whether the advice being offered makes sense to you. 2. Determine how much you can really afford to spend. Did you hear about the guy who won $4 million and proceeded to pay off his mother’s house after buying homes and cars for himself and for each of his two children? The lottery made him wealthy, but he did not remain wealthy. If you wish to remain wealthy over the long term, and leave a legacy for your heirs, then before making major buying decisions, determine how much you can spend without squandering your principal. Depending on your age, that’s likely going to be 3-5% per year of your total after-tax winnings. So if you net $50 million, you may be able to comfortably spend around $2 million each year while potentially preserving your principal over time. 3. Protect yourself. The wealthier you are, the greater your risk of falling victim to various schemes, scams and lawsuits. You’re also much more likely to be approached for help from friends and family members as well as for donations to charities. Work with your attorney and insurance professional to create liability protection against lawsuits, and have one member of your team serve as your spokesperson for all financial requests. It isn’t always easy to say “no,” but it’s not too difficult to tell those seeking a piece of your wealth that all requests must go through your financial representatives. This Industry Insight was written by Sara Botkin. Sara Botkin is President of Botkin Family Wealth Management in Peters Township. Visit www.botkinfamilywealth.com or call 724.941.1737 for more information. Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Private Advisor Group. Botkin Family Wealth Management and Private Advisor Group are separate entities from LPL Financial. Upper St. Clair | Spring 2016 | icmags.com 15