Knoxville — So you’ve just won the lottery.
It’s time to cash in, but going from your normal income to having millions can be a little intimidating.
That’s why experts say you need some help.
“Have a team in place — almost like a personal board of directors,” said Knoxville attorney Fiona Hill.
She says to get a CPA, a financial advisor and a lawyer in place before you announce your lottery win to the world.
“Keep off social media, because there’s going to be friends, family members, strangers coming from all over the world to try to get a piece of the pie, and I’d think that you’d want to keep quiet until you have everything in order,” Hill said.
Fellow estate planning attorney Tom Ramsey said to be sure to understand that you will be taxed heavily.
“They’re going to have a major tax problem,” Ramsey said. “Taxes have changed. Now, it’s a 22-million-dollar-per-couple exemption. In other words, you can inherit 22 million dollars, or pass along $22 million, tax-free.”
After that exemption, you’ll see big chunks taken out by taxes, including 40 percent for your federal income tax.
That’s why he said managing that money is key.
“The first thing a financial planner’s going to want to know is more about their current life circumstances,” financial planner Paul Fain said.
Fain, who works at Asset Planning Corporation in Knoxville, said a planner will look at your debt and your budget.
“I wouldn’t make any radical changes in your spending pattern immediately,” Fain said.
He said your investments have to be well thought-out to be successful.
“There are vehicles that attorneys and advisors can help you set up that are tax efficient, but also give you some framework for how you distribute these funds,” Fain said.
Fain said coming into that much money can be stressful — sometimes causing divorces and ruining friendships.
He said that’s all the more reason to have a good plan in place if you strike it rich.
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