CLEVELAND, Ohio -- Because you know (or really, really hope) that you're going to win the $1.5 billion Powerball jackpot Wednesday, there are a couple things you should do today, according to two financial advisers who've had lottery winners as clients.
If you're like me, you've made the list of things you'll do with your fortune: I'll pay off my home, buy vacation homes for my parents and in-laws, quit my job, pay off the mortgages for my siblings' and best friend in Nashville, set up a college fund for my niece, give a ton to my church, and so on.
While you're thinking through your wish list, you should take a look at this to-do list:
First, sign the ticket. Sign it right now. Don't wait until after the drawing.
"Lottery tickets are like cash. The possessor is the owner," said Ric Edelman, CEO of Edelman Financial Services, a Virginia financial adviser whose clients have included a few lottery winners in recent years.
The piece of paper that Powerball tickets are printed on are bigger in size than normal lottery tickets. The two I bought had two spots to sign on the back. So I signed and printed my name in both spots. You can't be too careful.
Second, write a list of the people you trust, said Westlake financial planner Scott Snow, who gained a Cleveland-area woman as a client a decade ago after she won more than $100 million in the Mega Millions lottery.
There will be a lot of people who will cuddle up to you to try to earn your trust very soon. But who do you trust today? Think about it. The list will probably be short. I know the names on my list could be counted on two hands.
After you discover that you've won $1.5 b-b-b-billion, here's what you should do:
1. Make a copy of the ticket and store the original in a safe place.
Experts recommend a safe deposit box at a bank. It would be horrible if you had a fire in your home and the ticket was destroyed. However, I'd worry about the chance of a car wreck -- and being carted away in an ambulance without your ticket -- on the way to the bank.
A possible alternative to the safe deposit box: a good, fire-proof lockbox that you can keep in your closet or under your bed.
2. Keep quiet.
If you've got a spouse, that should be the only person you tell right now, besides the professionals you hire. That means you don't tell your mother, or your best friend, or anyone, said Edelman, a New York Times best-selling author who has been ranked three times as the No. 1 independent financial adviser in the nation by Barron's.
"Let the news sink in before you tell anyone you've won," Edelman said. "Your life is going to change in ways you can't anticipate.
"Your relationship with virtually everyone you know will change," he said. "Many people are going to expect money. Many will ask for money. Many will demand it." You need time to wrap your mind around the enormity of being a billionaire, at least until the government gets its hands on your money.
3. Contact a financial adviser.
If you don't have one, get one fast. You'll want a certified financial planner with a solid record and reputation. Ask a couple of people for referrals if you can do so discretely. One good place to search, the Financial Planning Association: http://www.plannersearch.org/Pages/home.aspx
Your financial adviser will be the quarterback of a team of professionals, Snow said. You'll also need an estate planning attorney, a tax expert, maybe a general attorney. But the quarterback will be the lead person.
4. Hire a professional to save you money in taxes.
A good tax planner could help you pay only 40 percent in taxes instead of 45 percent, said Snow, a certified public accountant and certified financial planner. If you don't think that sounds like much, think again: 5 percent of $1.5 billion is $75 million.
5. Don't claim your windfall immediately.
You have 180 days in Ohio to claim your prize. While Ohio is one of six states that allows you to remain anonymous (along with Delaware, Kansas, Maryland, North Dakota and South Carolina), anonymity isn't realistic, Edelman said.
Even though a blind trust may be a good idea, it's no guarantee.
"You need to be prepared to be outed," Edelman said. "There will be a few people who know your identity ... To believe you can keep it secret that you've won $1.5 billion? That's impossible."
Snow agreed anonymity isn't likely. A jackpot exceeding a billion dollars is a first. You need to enjoy the peace and quiet you have now, and "get your ducks in a row before your world turns upside down," Snow said. Your life changes when you step into that lottery office to claim your prize.
6. Get some sleep.
As much as possible. The excitement of the days ahead is going to be unimaginable. You want to have a clear head.
Snow still remembers the craziness surrounding his lottery winner client a decade ago (he didn't know her previously). "That first week was so stressful," he said, noting that, unlike many lottery winners, his $100-million-plus winner is still doing well today.
7. Divide control of your wealth.
Make sure your financial adviser doesn't actually have custody of your money, Snow said. You want to make sure your money is housed at a reputable, SEC-registered company such as Fidelity, Vanguard, Schwab, etc. Better yet, invest it at more than one company. Make sure your adviser doesn't actually work for the investment firm, Snow said. You can't trust anyone too much. Think Frank Gruttadauria. Think Bernie Madoff.
8. Don't go crazy with investments.
A smart tax-free bond on your hundreds of millions will yield you $39,000 per day, Snow said. That's more than many people earn in a whole year. You should be able to get by on $39,000 per day without considering any wacky, so-called investment "opportunities."
9. Think about your security.
You may want to hire some security "before the media circus starts," Edelman said. And a security consultant will advise you not only about safety and privacy when you're out and about, but also on issues like securing your home, locking down your financial records and driving different routes to work, church and school.
10. Keep a stack of your adviser's business cards in your pocket.
Everyone from your next-door neighbor to your jogging partner to your long-lost cousin will expect a handout of money, Edelman said.
Unlike someone who builds wealth through a business, a person who won the lottery isn't really respected. A lottery winner just got lucky, and your friends and relatives may think they're just as deserving as you are.
"They will have an expectation about how much you should give them," Edelman said.
So that you don't have to be in the position of sifting through the requests and telling loved ones "no" to their face, you should simply provide your adviser's phone number to anyone who asks for money. "Say, 'Here's the number for my financial adviser. He controls my money. Call him,' " Edelman said. "That way, I become the bad guy."
11. Figure out ways to stay grounded.
You should write down your goals and objectives. For many people, it's family, friends and financial security, Snow said. If you're not going to be working any more, and you're no longer going to be motivated by money, you need to figure out what makes you happy and what you'll do with your life.
This may sound hard to believe, but bankruptcy, depression, divorce and even suicide are quite common among lottery winners, Edelman said.
You have to work hard to remain grounded and not let your life get out of control. There are many lottery winners who make good choices and live happily ever after, he said, but often times, "Winning has been much more bad than good."
12. Weigh whether to keep your job.
Many people enjoy what they do, and continuing to work is a good way to remain grounded, Edelman said. But it will be difficult to go to work every day with people who know you won $1.4 billion.
"Some people will resent you," he said. "They'll think they were just as deserving as you. You will be a daily reminder that you won and they didn't."