This Wednesday, millions of people will be glued to their TVs and browsers, waiting for the $1.4 billion Powerball jackpot to come through. For a handful of lucky winners (namely, you), this is the day that all financial woes instantly become memories.
Once you win, when the shock wears off, don’t think you won’t have problems, because you definitely will. Here’s a taste of what’s coming down the pike:
Better Pay The Taxman
Right off the bat, you can expect a visit from your friendly IRS agent. The federal government taxes your gambling winnings just like it taxes everything else, and the government withholds income taxes, whether you take a lump sum or the annuity. The state also takes a piece, of course. In some states, if you take the lump sum, you can expect to wind up with “just” $600 million or so.
And you’ll want to pay out, because the IRS doesn’t take kindly to highly visible tax fraud. Just ask Rhoda Toth, who won $13 million in 1990, lied on her tax return about it, and ended up with a two-year jail term and a $1 million tax bill.
Your Marriage Might Fall Apart
Finances and debt are easily the biggest stressors in any relationship, and it turns out that making a lot of money suddenly is just as likely to cause fights and divorce. Lara and Robert Griffith were divorced less than two years after hitting the jackpot. Willie Hurt lost his fortune due to a divorce. And if you get a windfall and want out, you’ll still have to pay. Denise Rossi tried to divorce her husband without telling him about winning and was ordered to split the prize anyway.
In some cases, a win can bring secrets charging out of the closet. Ibi Roncaioli won $5 million in a Canadian lottery and hid the prize from her husband in order to give $2 million to a secret son. When her husband found out, he murdered her with an overdose of painkillers. (Geez, eh? Not very Canadian of you.)
Your Friends And Family Become Your Enemies
You’d think everybody around you would be happy for you, right? Well, sure, at first. But just like making a lot of money has a way of changing people, seeing somebody close to you make a lot of money can make things weird, fast.
There is no better example of this than the tragedy of Bud Post. Post, within a year of winning, discovered his own brother was trying to kill him (he actually brought in a hitman to do the job). Post spent most of his life being sued by family and friends and in divorce court, becoming the prototypical sad-sack lotto winner.
Everyone Wants Your Money
Another factor is that the harassment starts from the moment your name is out there and does not stop. Billy Bob Harrell Jr. was generous with his money, donating tens of thousands to his church and 480 turkeys to the poor. Harrell was hounded by anonymous callers demanding donations for years until the pressures of that and his collapsing family life led him to commit suicide.
Your Worst Enemy Is Right There In The Mirror
The biggest problem for lottery winners, though, often boils down to the man in the mirror. If you go down the list of people who struggled after winning the lottery, you’ll find a common theme. They do everything everybody says they would do if they suddenly got rich, and then discover that there’s a reason rich people don’t generally buy six houses and a fleet of luxury cars.
Similarly, you can suddenly indulge your worst habits, and not everyone can handle that. Evelyn Adams was a compulsive gambler who hit the lottery two years in a row, winning over $5 million, and gambled it all away. Michael Carroll, a garbageman, turned out to have such a taste for prostitutes he lost $15 million on them. It doesn’t even have to be a vice: Vivian Nichols famously spent thousands on high-end clothing.
Even if you fly on the straight and narrow, you’ve still got a lot of money to manage. Suzanne Mullins lost it all not because of any one decision, but because the financial burden was so overwhelming.
So, after realizing that you have the winning ticket on Wednesday, turn off your phone, hire a lawyer, find an accountant, and consider going into hiding with your spouse for a few months. Otherwise, you might find winning the lottery is more trouble than it’s worth.
But seriously, once you win, call us. We have an idea for a concept restaurant that you’re going to love!
