After you win the lottery: the complete guide

The first hour: check, sign, secure

1. 1Check the numbers against the official source, not a screenshot or a message. Check the draw date and the game.
2. 2Sign the back of the ticket straight away. In many places an unsigned ticket belongs to whoever holds it.
3. 3Photograph the front and back, and store the ticket somewhere very safe: a safe, a bank deposit box or a fireproof container.
4. 4Do not post anything on social media. Do not tell people in a group chat.
5. 5Write down the date and time you found out, and the circumstances in which you bought the ticket.

If you won in a pool, make sure the rest of the group has seen the photos and your written agreement before anything else happens.

The first week: build your team

Most lotteries give you time to claim, commonly between a few months and a year depending on the state and game, which means you can take your time and should. Use it to hire advisers who have no stake in how you decide: a tax adviser or accountant, a lawyer who works with large winnings, and a fee-only financial adviser. Interview several. Avoid anyone who approaches you first, promises returns or asks you to move money quickly. Pay for advice from the prize, and keep your advisers separate so they check each other.

• Ask each adviser how they are paid and what could go wrong.
• Get everything in writing.
• Do not sign anything you do not understand.

Lump sum or annuity?

The lump sum is a fixed amount now, usually about half the advertised jackpot, taxed in one year. The annuity pays 30 graduated payments over 29 years, rising 5% a year, taxed as you receive it. The right choice depends on what you could earn on invested money, your discipline, your family situation and your tax position. Use the lump sum vs annuity calculator with real numbers and discuss it with your advisers. Many advisers prefer the lump sum for disciplined investors and the annuity for those who fear spending too fast.

Taxes: the part everyone underestimates

Federal tax is withheld at 24% above $5,000, but the real rate on a big win reaches 37%. State and sometimes city tax comes on top in most states. A winner of a very large prize can easily pay about 40% or more of the cash option in tax. Set the tax aside in a safe account the moment you claim. Our lottery taxes complete guide explains every layer, and the lottery tax calculator estimates your own figure.

Privacy and anonymity

Winners are often named and photographed. Whether you can avoid that depends on where the ticket was bought. A number of states allow large-prize winners to stay anonymous, others require publication, and some allow limited protection or claims through a legal entity. Ask a lawyer before you claim, because the choice is hard to reverse once your name is public. Our guide on staying anonymous lists what we found and where to check.

• Change your phone number if you are publicly named.
• Think about security at home and online.
• Review privacy settings on every social account.

The people problem

Newly rich people attract requests. Distant relatives, old friends, charities, "investment partners" and strangers will all find you if your name is public. Decide in advance what you will give, to whom and how, and put a gatekeeper such as your lawyer between you and requests. A simple rule that works for many: gifts are decided once, with your advisers, not in the moment.

Talk to your closest family before you tell the world, and set expectations. Agree what you will do for them, and what you will not. Resentment grows in silence.

The first year: spend slowly

1. 1Park the money in safe, boring places while you plan: insured accounts and short-term government securities.
2. 2Pay off high-interest debt and cover essentials.
3. 3Give yourself a fixed monthly income from the money, like a salary, instead of dipping into the pile.
4. 4Make no major irreversible decisions for at least six months: no quitting your job in a rage, no business launches, no big property purchases.
5. 5Review your insurance, your will and who would inherit.

The stories that warn us

Not every winner's life falls apart, and many do very well. But the failures are instructive, and they share patterns. Jack Whittaker won a $314.9 million Powerball jackpot in West Virginia in 2002, then reportedly had large sums of cash stolen from his vehicles and office and faced legal troubles, and his family suffered heavy losses, with Whittaker saying that he wished he had torn up the ticket. Billie Bob Harrell Jr. won $31 million in the Texas lottery in 1997, gave away money generously, spent heavily and, according to news accounts, took his own life less than two years later. Evelyn Adams won two New Jersey jackpots in 1985 and 1986 worth about $5.4 million in total, and later lost it to gambling and generosity. Abraham Shakespeare won about $30 million in Florida in 2006 and was murdered in 2009 by someone who had befriended him.

The lesson is not that winning is a curse. It is that sudden wealth, secrecy, trust, generosity and spending can combine badly, and that preparation matters. Our guide on lottery winners who lost it all goes through the patterns.

If a win, or anything else, leaves you struggling, talk to someone. In the US you can call or text 988, the Suicide and Crisis Lifeline. Elsewhere, contact your local emergency number or a crisis line.

If your prize is crypto

A crypto prize adds practical points. Use a fresh wallet you control, back up the recovery phrase offline and never share it. Double-check the network and address when giving them to the operator, and test with a small amount if you can. Prizes in a dollar-pegged stablecoin avoid price swings, and the tax value is the dollar value on the day you receive them. Move large amounts to a hardware wallet. Our crypto lottery prize checklist and wallet security guide go through each step. Beware of anyone who contacts you offering to "help" you claim or secure the prize.

Scams aimed at winners

See the full list of red flags and what to do in our scams guide.

• Fake "winner" emails and calls that ask for a fee, a tax payment or your personal details.
• Cloned websites that imitate a lottery's claim page.
• "Advisers" who approach you first.
• Romance and friendship scams that build trust over weeks.
• Requests to move money to a "safe" wallet.

Giving: do it well

Many winners find that giving is the most satisfying use of the money. Do it with a plan: decide a total, research causes, ask about how gifts are used, and consider a donor-advised fund or a family foundation with your advisers. Giving spreads the money to worthwhile uses and can be tax-efficient, though the rules are complicated, so do it with advice.

A one-page plan

1. 1Sign and secure the ticket. Stay quiet.
2. 2Hire a tax adviser, a lawyer and a fee-only financial adviser.
3. 3Decide anonymity and claiming method with your lawyer.
4. 4Decide lump sum or annuity with real numbers.
5. 5Set aside tax immediately.
6. 6Set a fixed monthly income and a gifting plan.
7. 7Spend slowly and make no irreversible decisions for six months.
8. 8Keep a small circle you trust and a way to say no.

Day by day: the first week

Questions to ask every adviser

1. 1How are you paid, and do you earn anything from products you recommend?
2. 2Have you worked with clients with sudden wealth before?
3. 3What could go wrong with what you are proposing?
4. 4What would you do if you were me, and why?
5. 5Can I have this in writing?
6. 6Who else on the team will see my information?

A sample first-year budget

Suppose a winner takes home $2 million after tax. A cautious plan might hold $300,000 in short-term safe accounts for the first year, set a fixed monthly income of $8,000 from a diversified portfolio of the rest, give $100,000 to causes and family according to a plan decided with advisers, and make no property or business purchases for six months. The exact amounts depend on circumstances, but the shape matters: a safe reserve, a steady income, a gifting plan and a delay on big decisions.

Talking to family and friends

• Decide in advance what you can do for people close to you, and say it once.
• Offer help that does not require a conversation about money every time: pay a bill once, fund an education, not an open tab.
• Use a line such as "my advisers handle all money decisions" to defuse requests.
• Talk to your partner or closest relative before anyone else, and agree a shared message.