A partnership has claimed the $1.34 billion Mega Millions lottery prize jackpot of July 29, 2022, the Illinois Lottery announced Wednesday, September 21.
The winners opted to remain anonymous (Illinois is a state that permits lottery-winner anonymity for those who win prizes of $250,000 or more) and chose to take the lump-sum pre-tax payment of $780.5 million instead of annual payments over 30 years, according to the Illinois Lottery.
As I mentioned in my previous lottery story, the winners had faced a deadline of 60 calendar days (in this case, Sept. 27) to decide if they wanted the cash option as opposed to the long-term payout, according to the Illinois Lottery Winners’ Handbook.
Just for fun, let’s assume you were one of the winners.
You Won $780.5 Million Pre-Tax: Now What?
For any winner of a large lottery, there is the big question: How do you find the right kind of expertise to manage your winnings?
As the author of a book just published by the American Bar Association called “The Discerning Investor,” I can share a few insights about how to choose the appropriate kind of help.
Here is the most important rule: Be guided by the U.S. Securities and Exchange Commission (SEC).
You’ll have two choices based on the laws that govern financial advice givers.
Former SEC Chair Jay Clayton laid out a very simple rule:
“Do you want someone managing your account on an ongoing basis based on your broad financial goals and needs and movements in the markets? If so, an investment adviser may be best for you. . . .
“Or do you plan to buy a few stocks, bonds, mutual funds or ETFs and hold them for the long term with a few adjustments over the years? In that case, a broker[-dealer] may be best for you.”
Investment Adviser or Broker?
Which is it? Do you need ongoing investment management? Or recommendations of particular stocks and bonds to buy?
I’m guessing it will be management, which leads to choosing an investment adviser that specializes in managing portfolios of the ultra-high-net-worth.
At this level of wealth, there is the other option of setting up your own shop, an organization called a “family office,” that provides all the financial, accounting and tax help that you will no doubt need for years and years to come. A family office is your own personal team.
No matter which course you take, get some help from trusted advisers who specialize in this level of wealth, preferably an accountant or an attorney.
Lottery Experience
If you’ve won a lottery or acquired newfound wealth and want to share your experiences with me anonymously for an article, write to me at forbes@juliejason.com.
Also, write to me if you would like to learn more about the special issues involved with ultra-high-net-worth services or about how to set up a family office.
Questions?
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