Do You Need a Financial Advisor If You Win the Lottery?

Avid lotto players have plenty of ideas for how they’d spend a jackpot prize. Unfortunately, history tells us that most people are not prepared for a multi-million-dollar windfall. A third of all lottery winners eventually declare bankruptcy—with some winners, like notorious lotto loser Bud Post, experiencing truly spectacular flameouts.

Without a doubt, you do need a financial advisor if you win the lottery. Here’s why.

Why You Need a Financial Advisor When You Win the Lottery

Financial Advisor with Lottery WinnersFinancial advising is indispensable for lottery winners. Winning the lottery immediately increases the size and nature of your estate, also known as your net worth. If you want to safeguard your win and keep the fortune in the family for future generations, you will need a professional to help you start planning before you even collect the winning cheque. Below we outline all the ways a financial advisor—a comprehensive financial planner trained to handle sudden wealth—can help you make the right choices to keep your money safe today and grow it for the future.  

Financial Advisors Help Winners Stay Anonymous

One of the most important, and difficult, tasks for lottery winners is to stay anonymous after winning the jackpot. Making your win public all but guarantees that money-seeking relatives, neighbours, business propositions—and even church pastors, as Marie Holmes learned the hard way—will come out of the woodwork looking for a slice of your money.

In Europe, most lottery agencies protect winners’ identities or advise winners against revealing their identities after their numbers come up. However, some American states and lotteries legally require winners’ names to be revealed—usually, along with their city and the location where they bought the winning ticket. Getting a financial advisor to help is the best way to avoid this happening.

Working together with a lawyer, a financial advisor can set up a lottery trust for your winnings. A lottery trust is a legal tool to help control your money and other assets. You can name your trust anything you like—some famous examples include The Lucky Duck Trust, The Banana Head Trust, and The Wish This Had Happened Sooner Trust. Like these winners, you could collect your prizes in the trust’s name and protect yourself from unwanted attention.  

Financial Advisors Help Distribute Lotto Prizes for Multiple Winners

In addition to keeping your name out of the press, a lottery trust is the perfect way to claim a prize for a group of winners, such as a workplace lottery pool. In this case, the winners can get financial advice and set up the trust together. After collecting the big prize in the trust’s name, the trustee (the person appointed to manage the trust) can distribute the winnings equally among all winners. This is an excellent way to ensure that members of a lucky lottery pool don’t end up in court arguing over their prize.

Financial Advisors Help You Decide Between a Lump Sum and an Annuity

Many major lottery games offer winners a choice to collect their prizes as a lump sum or in the form of smaller yearly payments called an annuity. A “lump sum” is never the full jackpot amount, while the yearly payments do eventually work out to the full jackpot amount.

While some countries don’t charge taxes on lottery prizes, American lotteries do. A financial advisor can help you decide whether to choose the lump sum or annuities option based on which is better for your tax and family situation, now and in the future. For example, if you decide to collect annuity payments, then your financial and legal advisor can ensure that you clearly name your beneficiary. If you pass away before collecting all the payments, your advisor can make sure that the payments are passed to the correct person and continue to offer tax and investment support that is in line with your wishes. Naming a beneficiary is equally important if you happen to win a big prize that’s automatically paid out in installments, such as the Cash4Life jackpot.

Financial Advisors Help You Invest Your Lottery Prize

Investing Lottery WinningsWinning the jackpot creates major changes in your life and outlook, so most advisors recommend not making any major investment or spending decisions for six months after collecting a major prize.

However, once you’re ready, your financial advisor can help you create a balanced investment portfolio to keep your winnings safe and help them grow over time. Popular investments include “safe” choices, such as certificates of deposit at reputable banks that deal with lottery winners; growth investments, such as some mutual funds, bonds, and company stocks; and investing in new business ventures. Your financial advisor can help choose the best investments for your lottery prize to minimize how much you’ll need to pay in taxes.

Financial Advisors Help You Control Debt

Most people have some form of debt, whether it’s a mortgage, credit card bills, or student loans to repay. These debts don’t go away when you win the lottery, and they shouldn’t be put on the back burner “for later.” Any debt you have will continue to build interest and follow you around until it gets paid.

A financial advisor can help you review current debts and make sure those are repaid first. Moving forward, your financial pro can work with you to prioritize your spending and make sure you don’t go overboard or rack up new and unnecessary debt.


Financial planning help is absolutely essential for anyone who is gifted with sudden wealth, whether it comes from the lottery or not. Financial advisors are trained to know how to invest money, navigate the local tax system, set spending budgets, and create a financial plan that will keep your lottery windfall in the family for generations. Trying to manage sudden wealth without financial assistance can easily end in bankruptcy or something much worse—as these biggest lottery losers found out.

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