What to do if you win the lottery, according to experts

The $1.5bn Mega Millions jackpot is third largest in US

The Mega Millions jackpot, worth a whopping $1.58bn, is currently up for grabs.

On Tuesday 8 August, players will have another chance to win the jackpot, which is the third largest in US history. The hefty prize has grown as a result of 31 straight drawings without a jackpot winner.

For a chance to win the prize, players can pick six numbers from two separate pools of numbers - five different numbers from one to 70 (the white balls) and one number from one to 25 (the gold Mega Ball), according to Mega Millions.

If a lucky individual wins Tuesday’s jackpot by matching all six winning numbers in a drawing, they could walk away with a cash option of $783.3m.

While there’s not yet a winner of the billion-dollar Mega Millions jackpot, experts agree that there are a few things each lottery winner should consider before making any decisions at all.

Make copies of your ticket and hold off signing it

If you manage to beat the odds and find yourself with the winning Mega Millions jackpot ticket, the first thing you should do, according to experts, is make multiple copies and take photos of the ticket.

“I would take a selfie with it,” Robert Pagliarini of Pacifica Wealth Advisors previously told Today. “I would take a video of the ticket and me smiling.”

As for whether you should sign the back of your ticket, many experts agree that you should hold off, as it may interfere with your ability to stay anonymous.

“If a client comes to me, and they have a ticket that’s unsigned on the back, I can really paint whatever picture they want and keep them anonymous all the way through the process,” attorney Kurt Panouses told Fox13. “So that’s really what my recommendation is, is to not sign the back of the ticket, just make a good copy of the back of the ticket, put it in a safe place.”

The same advice is also given by insurance company State Farm, which notes that you shouldn’t sign your ticket because “in some cases, signing your ticket might prevent you from creating a blind trust later”.

Try to keep from sharing the news

While a life-changing lottery win is easily going to become one of the most exciting things to happen in one’s life, experts also advise against sharing the news publicly.

“Other than a spouse or life partner, I wouldn’t tell anyone about your good fortune until after you’ve created a solid plan with the professionals,” Laura Adams, author of Money Girl’s Smart Moves to Grow Rich, told Today. “Well-meaning friends and family may not offer you the best financial advice.”

State Farm also advises against sharing the information with anyone. “Some lotteries will require you to make your name public, give interviews or show up at a press conference. If so, be sure to change your phone number and set up a new PO box beforehand to avoid being inundated with requests,” the company advises. “You may also consider forming a blind trust through your attorney to anonymously receive the money, keeping your name out of the spotlight.”

Consult a financial advisor, lawyer and accountant

After making multiple copies and placing a winning ticket in a secure place, perhaps the most important thing for lottery winners to do is form a team of trusted advisors, made up of financial advisors, lawyers and accountants.

“You’re going to need a lawyer, accountant and financial advisor who have experience with large financial windfalls - finding them should be one of your first steps before you claim your money,” State Farm says.

According to experts, winners should seek help from financial experts regarding their choices when it comes to their prize money, as Mega Millions notes that the jackpot winnings can be paid out either as a discounted lump sum payment or an annuity over multiple years.

“Long-term investments take financial wisdom and restraint, but with careful planning, you may be able to grow your lump-sum winnings larger than the future annuity payments would have been. However, if you need some structural help to keep from overspending too quickly, an annual payout is a solid, responsible way to make sure you’ll continue to have income through most of your adult life,” State Farm notes.

Financial advisors can also advise about taxes and help winners plan their big picture goals for their newfound wealth, while lawyers can advise winners on their rights when it comes to remaining anonymous.

Create a budget and refrain from handing out cash to loved ones

While it may sound appealing to start spending millions of dollars on vacations or luxury homes, the best thing that lottery winners can do is create a budget.

“Realise it’s not a bottomless pit of money. Don’t spend wildly in the belief that it’ll last forever,” Edelman told Today. “A financial adviser can tell you how much income you can receive monthly from your winnings - you need to live on that amount or less.”

However, that doesn’t mean that you can’t splurge, as Erica Sandberg, personal finance expert and author of Expecting Money: the Essential Financial Plan for New and Growing Families, told the outlet that it’s all about “balance”.

“Set a budget, but also allow yourself those dream purchases. It’s a balance,” she said.

The reminder is especially important considering “lottery winners are more likely to declare bankruptcy within three to five years than the average American,” according to CNBC.

In addition to a budget, lottery winners should also avoid lending money to loved ones, or anyone who comes seeking it, as William R Patterson, chairman and CEO of the Baron Solution Group, told Today this is “one of the fastest ways to lose your money”.

“Don’t feel obligated to bail out, reward, loan or give out lumps sums of cash to friends and family members,” he said. “Talk with your financial advisers about strategies and vehicles, such as trusts, that can allow you to help others and also preserve your wealth. Additionally, cash and other gifts can have significant tax consequences.”

The next Mega Millions drawing will take place on Tuesday 8 August at 11pm ET.