Mega Millions Tickets

Patrick Oehler/Poughkeepsie Journal via USA TODAY

You Won The Lottery... Now What?

October 22, 2018 - 1:19 pm

NEW YORK (WCBS 880) -- Lottery fever continues to grip the nation with the jackpots in the Mega Millions and Powerball lotteries now adding up to more than $2 billion.

Anybody buying a ticket has been dreaming how to spend their fortune should they win.

But what should you really do if you are lucky enough to strike it rich?

We asked CBS News business analyst Jill Schlesinger to share some practical advice on what to do before spending like there's no tomorrow.

Schlesinger says if you hit the lottery or come into some unexpected money the first thing on the agenda should be assembling your team.

"And not an entourage, not like your old high school buddies, you need to interview estate attorneys, accountants and certified financial planners," Schlesinger told WCBS 880 anchors Paul Murnane and Wayne Cabot. "This is something really important because without doing this you are really flying solo and you've never gotten this kind of money before. Even if it doesn't seem like a ton to anyone else, even if you just got some some lump sum of money you never expected, your great aunt Sarah left it to you, you really should get some help."

It's important to ask the right questions when building that team.

"When I was a practicing financial adviser and investment adviser I had a couple come into my office and they started the conversation saying, 'We've come into some money, we just want to talk about your services. What you do?' And really what they were trying to figure out is, is this person going to treat everyone with respect? Are they just coming after me for my money and at the very end of the interview I remember saying, 'How much money did you inherit?' And they said, 'Oh we didn't inherit money, we hit the lottery and it was $80 million.' And I almost fell off my chair," Schlesinger recalled. "But what was fascinating is that the wife said, 'You know, I just wanted to know what kind of a person I'm going to be dealing with. Are you treating all of your clients with respect or just the rich ones?' So there is something to be said for that."

Schlesinger also suggests asking how much do you charge and what is the relationship going to feel like?

Once you've got the team together, the number one question to ask is do I take that lump sum or do I take the annuity?

"Is it $1.6 billion which is annual pre-tax payments over 30 years of tens of millions or do I take that lump sum, $900 million pre-tax, I know it's New York you have to pay an extra tax so you'll have to make do with the $600 million or so," Schlesinger said.

With no winner since July, the jackpot for Tuesday night's Mega Millions drawing has climbed to a whopping $1.6 billion -- the largest lottery prize in U.S. history.

The odds of winning the big one are one in 302.5 million.