Among the most notorious tales of a lottery winner's misfortune was West Virginia's Jack Whittaker, who won $315 million in 2002. Five years later, he blamed the money for causing his granddaughter's fatal drug overdose, his divorce and hundreds of lawsuits filed against him. He said he couldn't trust many of his friends and relatives.
Even more modest prizes can come with problems. A woman was convicted late last year of slaying Florida lottery winner Abraham Shakespeare, who won a $30 million jackpot in 2006. Prosecutors say the woman befriended him, became his financial adviser and swindled him out of his dwindling fortune before killing him.
The advisers say there's nothing wrong with some modest splurges. But the winner shouldn't rush out and buy a new house before considering how this change will affect them, said Eric Lewis, the chief investment officer at Bedrock Capital Management, Inc. in Los Altos, Calif.
"Satisfy your urge to splurge, prudently. Take a small portion of the winnings and spend it on a few things or experiences you've always wanted. A new car, a big TV, a fancy vacation, a great bottle of wine, etc.," Lewis said. "With the exception of a modest splurge, force yourself to chill out regarding spending your new wealth. You'll get more satisfaction from the money, and it will be more likely to last, if you take the time to reflect on what you want from your new lifestyle."
Several said a therapist should also be on the list of people to consult.
"You need a plan, and it should include some kind of counseling. You can have the best lawyers and everything, but it goes to people's heads," said Goldberg. "Lottery winners have ended up in divorce, bankruptcy, suicide because they don't know what to do and how to handle the money."
Follow Brendan Farrington on Twitter at https://twitter.com/bsfarrington
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