Quoted:   I wonder what the rate of kidnappings are for those who receive lump sum payments?

It varies with the part of the country, your demographic, and the overall economic situation.  In Texas, for instance, if you are a poor Mexican guy with family in Mexico, the best thing that you can do is a)get your family out of Mexico NOW (not always to the US -- just out of Mexico) and/or b)never talk to anyone in Mexico again.  Exposure to Mexican kidnapping is a major issue, and that has been bleeding over into Texas for about ten years now.  This is very similar to the kidnapping industry in Houston and East Texas in the 1960s and 1970s -- all family relationships, where one family member made it big and their poor relatives were still surrounded by shady people.

That's not much of a risk assessment, but that's been the experience down here.

Quoted: It is amazing some of the stories that come out with features up to and including murder, mayhem, arson, and in one case, having the winner declared mentally unsound, subjected to involuntary commitment and then made the victim of abandonment in a state facility.  Guy, in good heath before winning, died 15 months after winning the lottery at age 52.  His kids (who had him committed) got it all.

It is unfortunately very easy to have someone committed in Texas.  I know two people who have been affected by other family trying to use that as leverage to take over management family affairs, to their personal benefit.  In both cases, there wasn't much of a satisfactory outcome.

Trusts, trusts, trusts -- I can't say that enough.  It doesn't matter how eccentric you act -- if removing your authority doesn't make one bit of difference in who can get the money, your eccentricity will be ignored.

Wow.

Great post. Very insightful.

I'd be fucking GONE.

Living in Montana on a 200 acre piece of property in the middle of fucking NOWHERE.

Quoted: Great post. Very insightful.

+1

It'll add detail to my fantasy when I'm mentally masturbating about winning.

Quoted: I'd be fucking GONE. Living in Montana on a 200 20,000 acre piece of property in the middle of fucking NOWHERE.

Fixed it for you.

Im not an idiot so im not worried about it

Austrian, eh?  Well then...G'day mate!

Quoted: Austrian, eh?  Well then...G'day mate!

FAIL.

Funny and informative ... my ADD must be vanishing, because I read it all.

Quoted: Austrian, eh?  Well then...G'day mate!

Quoted: Austrian, eh?  Well then...G'day mate!

Let's throw another shrimp on the barbie

Quoted: Austrian, eh?  Well then...G'day mate!

Ask him about the kangaroos!

Quoted: Quoted: Austrian, eh?  Well then...G'day mate! FAIL.

On a somewhat-related note, I guess I didn't realize Austria shared a border with Slovenia.

When I was doing my undergrad, our uni's tennis team had these two girls from the same town in Slovenia.  My Gawd, were they hawt.

Also, a lot of my family came here out of Austria in the late 1800s until about 1930.

Quoted: Quoted: Austrian, eh?  Well then...G'day mate! Let's throw another shrimp on the barbie

Thank you.  At least my post wasn't wasted on you.

Edit to add:
www.imdb.com/title/tt0109686/quotes

Quoted: Quoted: Quoted: Austrian, eh?  Well then...G'day mate! Let's throw another shrimp on the barbie Thank you.  At least my post wasn't wasted on you.

I love that movie

Quoted: Quoted: If you win over here its all one lump sum with no tax to pay, and no publicity if you want anonymity. We do of course get the morons who opt for publicity and then proceed to bankrupt themselves in record time, but the ability to get your money with no-one knowing is there as well. I think several states in the United States REQUIRE you to participate in promotional events and efforts when/if you win.  But you can keep these to a minimum and you can get your act together BEFORE YOU CLAIM the jackpot.  I think most awards are open for a year or more.  And the longer you wait, the less press you are going to get because the news can only run the "who is the mystery winner" segment a few times before they have to move on. I used to know more about how EuroMillions worked, but I haven't paid attention in years.

i was going ot ask cant you ask to get your winnings anonymously? the part about hiring a top lawyer with a big firm first thing.. is spot on....

Does the OP work in the lottery industry by chance?

Good write up thats why I didnt finish Law School, to much reading, but i'm kicking myself now. I've known 1 guy that won 100k he was single and had the same type experiance as you describe. Your right though, plus its the odds are just a stupid "Hope and change" tax imo. Good luck!

Hello...Remember me !!!!


I am your long lost brother.

The one that your Dad thought was safe in the condom....

I escaped...

How about little hand UP and meet your niece while your at it.

uxo2

By the way...excellent write up.
I myself if the day will ever come will never tell family.
And I will work as a Wal-Mart greeter to torment ARFCOM'ers while I blade them
and have a massive adrelinalin dump  when I ask for a RECEIPT..........................

Quoted: Does the OP work in the lottery industry by chance?

No.  (Is there a "Lottery industry?")  I'm in finance.

Quoted: Quoted: Does the OP work in the lottery industry by chance? No.  (Is there a "Lottery industry?")  I'm in finance.

Yes

It'd be tough for family to find me on my 10,000 acres in the Dakotas, or on my 100' yacht in whatever bay I'm anchored in that week, to bitch about their trust not being fair.

Kharn

Quoted: <-- Just posting to feel part of such an excellent post and observation of human nature.

+1

i'm sure i'll never need the above info...

Good thread.  Trusts, Corporations and Limited Partnerships are essential.  

Control everything, own nothing.

DBA
Doing Business As
Why no thats not me
How "Cute" they always say everyone has a twin somewhere.

He's right
I dreamed of this while haze grey and underway
So it good input I hope to need one day.

Have your "compnay" buy a house for Upper managment to live in
Company cars... you get the picture.
But have a lawyer do it because you will have a big sign on your back
I plan on legally screwing the .gov out of every penny I can

Edit: Missed above post same idea

Quoted: Quoted: I'd be fucking GONE. Living in Montana on a 200 20,000 acre piece of property in the middle of fucking NOWHERE. Fixed it for you.

Thanks, don't know what I was thinkin on that one.  

I don't have the details but I remember someone winning a lottery and they had their attorney pickup the check, completely anonymous.

Thanks for the timely post Austrian.

I plan on winning the mega millions this weekend.

I'll shoot you an im for the representation paperwork when I win.

TXL

ETA, someone, remind me to buy a lottery ticket,  I know the odds don't change owning one and not owning one, but still, I like my chances....

Who am I kidding, I can't even win a drawing on Arfcom in 7 years....

I'm not sure I agree with the "no investment manager" portion of that, but the rest of it is spot-on.  I think a good investment manager from a big firm could do you very well.  Plenty of other rich investors in the country use them, yes you are paying more in fees but you are very likely getting a much higher return than an index fund.  You'd just have to be smart about it, and stay diversified.

The key to all this is to find out how the other wealthy people do it.  You aren't the first multi millionaire in the country, nor will you be the last, and they all manage to do pretty well without being accosted by thieves and parasites.  My thoughts on this:

1.  Stay low-profile.  Use a trust or LLC to manage your assets through your law firm, which will remove direct ties from your property to you.

2.  Get a VERY good law firm to take care of all your needs, do not dispense any money without consulting with them first.  Personally I wouldn't care what they charge as long as they are the BEST I can get.  This is not a situation where you want amateurs working for you.  As the OP said, do not just write checks to people who ask for it, set up a trust and have the money dispensed through it.  They will still get their money, but will not see you as a walking ATM.  The lawyer thing applies to almost any transaction you will carry out.  If someone wants to talk to you, they have to go through your lawyer first.  Shut up and lawyer up.

3.  DO NOT CARRY LARGE AMOUNTS OF CASH!  Whittaker was a class A idiot to have 500K in cash anywhere but a bank vault or a safe.  There is no reason why anyone, especially a rich person, should have that much cash on hand.  It's dangerous, foolhardy, and that's what credit cards and certified checks are for.

4.  Stay out of bars, strip clubs and casinos.  If you must go to one, don't go anyplace local, fly to Vegas and become just another face at the craps table.  Do not go overboard with alcohol, as that's the biggest thing that has brought down more lottery winners than anything else.  All the money in the world won't keep you out of jail if you get drunk and hurt or kill someone, to say nothing of the lawsuits that follow.

5.  Relocate.  Some folks may not be able to or may not want to leave their homes, but at least buy a different house in the area and live out of that one.  Personally I'd buy a large estate somewhere else in the country (like Montana), and keep a smaller house or condo in my hometown to live out of, preferably in a gated community, or at least in a very affluent neighborhood.  You do NOT want to stand out in the crowd, that's asking to get robbed.  Obviously things like unlisted phone numbers and changing cell phones are a no-brainer.

The biggest message out of all of this is to stay as anonymous as possible.  You don't want to be the richest guy in the state, you want to be another face in the crowd.  You don't necessarily have to sever all personal connections, but you're going to have to keep everyone at arms length until you can get acclimated to your new life.  People say that winning the lottery is the worst thing that could happen to a person, I disagree but I haven't won it yet, so what do I know.  

But what if you want to use your money solely for EVIL?

Fuggit.  I wouldn't tell anyone, but I guess they'd have their suspicions when I buy a few thousand acres out in the sticks and build a fortress and some toys (guns, ATV, boat, car).

It seems that many of the people who had the biggest problems, like Whittaker or David Lee Edwards, were trying to be a big fish in a small pond.

Whittaker was rich already, but he didn't have to strut around his home town buying houses and cars for everyone he met, giving his teenage granddaughter huge wads of cash and playing kingpin at the titty bar.

Edwards was poor, and moved to West Palm Beach after he won, but he was frequently spotted in his old Kentucky town, sometimes reportedly in a limo wearing a full-length fur coat. He also starred in a documentary special that showed off all of his stuff, much of it actually worthless reproductions that he payed incredible prices for (and he was apparently already mostly broke when the special was filmed).

It would seem to me that the best thing you could do, after claiming the prize as anonymously as possible, is try to live in a place where your money is nothing, and others around you have much more (preferably both money AND fame).  While you are there, you can set up an anonymous life in another place, where you can live quietly.

Best thing you could do with that money is payoff the lottery people and the media a couple mill to let noone know that you have the money and just carry on with everyday life...

double taporama

The "no investment manager" is a bad idea for most lottery winners, IMHO. Many have been working stiffs their entire lives, and asking them to manage several tens of millions of dollars dumped on their laps is a bit much. It's true that after-fees returns will probably be lower than the market, but that's not the point. The point is to protect yourself from your own stupidity and ignorance.

I'd go to one of the big wealth management companies for high net worth individuals--Northern Trust, US Trust, UBS, Goldman Sachs, etc. Very blue blood, and they're not going to abscond to Cancun with your winnings and a stripper.

Quoted: The "no investment manager" is a bad idea for most lottery winners, IMHO. Many have been working stiffs their entire lives, and asking them to manage several tens of millions of dollars dumped on their laps is a bit much. It's true that after-fees returns will probably be lower than the market, but that's not the point. The point is to protect yourself from your own stupidity and ignorance. I'd go to one of the big wealth management companies for high net worth individuals--Northern Trust, US Trust, UBS, Goldman Sachs, etc. Very blue blood, and they're not going to abscond to Cancun with your winnings and a stripper.

I am not trying to be pedantic, but two of the four companies you have mentioned have been sued in recent memory for investment managers who have done essentially that or who have been so radically unserious that they clearly put their clients at risk.  The good thing about larger companies is that they will often eat losses from their own incompetence.  Not always, though, not always.

ETA:

To offer a solution (as opposed to being a jerk):

What I look for in an investment manager:

1.  Age -- they need to have been in the business through a few sharp downturns.
2.  Time horizon -- they need to reflexively see weath management in terms of estate planning, not in terms of your lifetime.
3.  Long track record of not doing too badly -- they don't have to do great, but they have to have very few seriously negative years.
4.  Lots of professional references -- being the authors of papers is not a bad sign.

The first two will knock out easily half of the "wealth management" and "high net worth specialist" people.

You can actually get this with smaller local firms.  The problem with them is not that they are small, but that when one person leaves it can wind up making a big impact.

ETA:

To use an example (that is not current, because Houston is a small town ...) the boyfriend of a friend of a friend was a stockbroker (and really only that).  He decided in about 1993 or so that he wanted to be an investment advisor of some sort.  He had been a stockbroker for less than a year, and previously he had sold matresses in a furniture store and that followed being fired as a car stereo installer.  Southwest Texas state dropout, drinking issue and some drug use.  Not really impressive, but he got on with a discount brokerage.  Anyway, he left Texas and wound up in Miami as an "investment advisor" and got himself into a "high net worth" segment of a national firm and found Miami to be a target-rich environment.  He got lots of new money, old people, South Americans (legitimate, as far as I know), and other folks to invest with him, and the big name of the firm he was working for certainly helped.  He knew a few things about electronics (he installed car stereos before he became a matress sale guy) and he jumped on the late 90s tech bandwagon as if he were an expert, and got all of his clients into things like Qualcom and Iomega and so forth as they were going up like rockets, telling them that they were "blue chip" firms.  Well, he kept them there through 2001, because, ultimately, he was a college dropout drunk/junkie with very limited experience who had BS-ed his way into a position with a very large company.  Old people lost their homes, angry Venezuelans hired very expensive Miami law firms, lawsuits were filed, and so on.  He lost his job, his condo, and eventually his girlfriend, declared bankruptcy, and was fined or banned by the SEC well after the fact (I am not sure what happened there exactly).  This guy was managing several hundred million dollars with no background whatsoever.  It happens.  And this was a very respectable firm.

This guy had not made it (and did not make it) though downturns -- not even one.

This guy was big into returns, not security.

This guy didn't have a track record (someplace like Miami has lots of new faces, so that was not that unusual, but a local presense really does help).

This guy certainly didn't author papers.

These folks are out there, and a large firm -- while often being able to screen people better -- does not guarantee that you won't have a negative outcome.

So pay attention to your specific person.

ETA:

And no, I never invested with him.  I couldn't believe that he was capable of staying employed for extended periods of time -- a lot of that was my friend's friend who pretty much got him up on time and kept him functional despite the drug use and alcoholism so that he could show up to work on time.  Sadly, she really enabled him to destroy a lot of people's wealth by trying to take care of him.

Quoted: 3. Decide right now, how much you plan to give to family and friends. This really shouldn't be more than 20% or so. Figure it out right now. Pick your number. Tell your lawyer. That's it. Don't change it. 20% of $114 million is $22.8 million. That leaves you with $91.2 million. DO NOT CONSULT WITH FAMILY when deciding how much to give to family. You are going to get advice that is badly tainted by conflict of interest, and if other family members find out that Aunt Flo was consulted and they weren't you will never hear the end of it. Neither will Aunt Flo. This might later form the basis for an allegation that Aunt Flo unduly influenced you and a lawsuit might magically appear on this basis. No, I'm not kidding. I know of one circumstance (related to a business windfall, not a lottery) where the plaintiffs WON this case. Do NOT give anyone cash. Ever. Period. Just don't. Do not buy them houses. Do not buy them cars. Tell your attorney that you want to provide for your family, and that you want to set up a series of trusts for them that will total 20% of your after tax winnings. Tell him you want the trust empowered to fund higher education, some help (not a total) purchase of their first home, some provision for weddings and the like, whatever. Do NOT put yourself in the position of handing out cash. Once you do, if you stop, you will be accused of being a heartless bastard (or bitch). Trust me. It won't go well. It will be easy to lose perspective. It is now the duty of your friends, family, relatives, hangers-on and their inner circle to skew your perspective, and they take this job quite seriously. Setting up a trust, a managed fund for your family that is in the double digit millions is AMAZINGLY generous. You need never have trouble sleeping because you didn't lend Uncle Jerry $20,000 in small denomination unmarked bills to start his chain of deep-fried peanut butter pancake restaurants. ("Deep'n 'nutter Restaurants") Your attorney will have a number of good ideas how to parse this wealth out without turning your siblings/spouse/children/grandchildren/cousins/waitresses into the latest Paris Hilton. Thanks for the write up I have no freaking idea how a trust works, how does it work in the US at least? How does it prevent you from being messed with by the neighbors, cousins, brothers,sisters,grandmother's second counsin's friend's neighbor?

It's a bit more complicated, but the short answer is that the money isn't yours.  You give up control of the money to a trustee and he doles it out according to the terms of the written agreement.  That's why you hire a top 100 firm.  The written agreement needs to be airtight.

Quoted: Why should I give my second or tenth cousins anything? I won't. Fuck them. Why should I care about some crooks cancer ridden, MS, heart trouble since birth, mother dying, sister has breast cancer, holly rollers, charity, sister has 30 kids and broke......ect, etc,etc? I won't. Fuck them. I will support my immediate family (brothers, mom, dad, my kids) The rest of the world can kiss my ass. I'm not falling for any bullshit. Like another poster said above. Vanish.

Pretty much this.  I might give a big donation to the NRA, and maybe help fund a heller like case sometime, but that's about it.

This is always been my plan:
1. Move to a hotel after finding out I won
2. Open up a new cell phone account
3. Consult a lawyer to handle the legal aspects
4. Move out of state
5. Buy a modest house in the country, and modest new cars.

There are way too many parasites running around, and I would never appear that I was rich.

I have a better strategy. Say I win today and get 132 million.

Take half up fron = 66 million
Pay half in taxes = 33 million
Give half to wife = 16.5 million

That seems manageable.

Quoted: Throw away money every week playing a game you have no statistical probability of ever winning.  They don't call it the "stupid tax" for nothing.

I buy a couple of tickets when the PowerBall gets huge.  In my eyes, spending $2 per week, or $104 annually, isn't that bad of a "chance."  I have friends who could go run up a $100 bar tab in no time.  My problem is I never remember to buy them - I spend maybe $20 a year for that "chance."  It's always fun to dream about it too, whether it is for 10 seconds or 10 hours...

Quoted: Quoted: Throw away money every week playing a game you have no statistical probability of ever winning.  They don't call it the "stupid tax" for nothing.   I buy a couple of tickets when the PowerBall gets huge.  In my eyes, spending $2 per week, or $104 annually, isn't that bad of a "chance."  I have friends who could go run up a $100 bar tab in no time.  My problem is I never remember to buy them - I spend maybe $20 a year for that "chance."  It's always fun to dream about it too, whether it is for 10 seconds or 10 hours...

Pretty much the same thing I do, except that I've already been paid to play.  In 1996, I came within one number of winning a $32M Powerball lottery out of GA.  Due to the way I played, I ended with over $5600.  In other words, I could spend $100 a year for 50 years and still be money ahead.  Of course, I don't spend anywhere near $100 a year simply because I live in a no-lottery state.


As far as the OP's original analysis, I would say that I believe that most successful lottery winners don't end up on the front page of papers after the fact.  Therefore, the "bad" lottery winners skew the results i.e. bad things happen to lottery winners.  This would leave me to believe that most of the successful lottery winners do what the OP suggests, which I think is excellent advice.

Merlin

Merlin

Quoted: The "no investment manager" is a bad idea for most lottery winners, IMHO. Many have been working stiffs their entire lives, and asking them to manage several tens of millions of dollars dumped on their laps is a bit much. It's true that after-fees returns will probably be lower than the market, but that's not the point. The point is to protect yourself from your own stupidity and ignorance. I'd go to one of the big wealth management companies for high net worth individuals--Northern Trust, US Trust, UBS, Goldman Sachs, etc. Very blue blood, and they're not going to abscond to Cancun with your winnings and a stripper.

I would go with a few foreign banks and invest in AA - AAA rated structured funds where the bank guarantees your capital.  Specifically I would work with some of the following: Crédit Agricole SA, Société Généralé, DBS Bank, HSBC

Most people who buy lottery tickets are miserable trailer trash in the first place, so it's no wonder that they spiral downhill when they get a large infusion of cash.  Like they say, money won't buy happiness.  But it will buy me Cadillac so I can drive around and look for it!  

There's a risk to everything, and you can certainly go wrong with a big firm. But there are a lot of NFL and NBA players that have been hosed by small boutiques. A local investment company just collapsed; turns out they were doing the ponzi scheme thing.

With a big company and firm instructions on capital preservation I expect you'd pay a lot of money for polite young men to not lose money too fast. They should also be competent at setting up trusts and estate planning.

ETA: that can still go wrong; see auction rate securities.

That is about more or less what I would do.

I know for a fact that my sister and her brood of 5 kids would be in my face begging for money left and right. Not to mention other parts of my family that I don't know..

The only people that would be getting ANYTHING right off is my mom/stepfather and one of my highschool friends who has helped me big time.

Other than that, they can talk to my lawyer.