$315 Million Powerball Winner is penniless
Remember Jack Whittaker? He was the West Virginia man who won the $315 million Powerball lottery on Christmas 2002, then the largest undivided lottery prize in U.S. history.
After the lump sum and taxes, he took home $113 million dollars.
His fame and fortune went downhill after he received his winnings. He has faced his granddaughter's death by drug overdose; he has been sued for bouncing checks at Atlantic City, N.J., casinos; he has been ordered to undergo rehab after being arrested on drunken driving charges; his vehicles and business have been burglarized; and he has been sued by the father of an 18-year-old boy, a friend of his granddaughter's, who was found dead in Whittaker's house.
Now, thieves have used fake checks at 12 City National Bank branches and cleaned Mr. Whittaker out.
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Can you feel sorry for him? The opinion is pretty much mixed. Historically, past lottery winners have not been doing so well. A survey taken a few years ago shows that over 75 percent of lottery winners end up poor or back to where they have started. Another survey tells us that lottery winners will go broke in less than 5 years. (I am looking for these sources, btw.)
Take another example. Juan Rodriguez, a parking attendant struck gold when he won the NY Mega Millions jackpot of $149 million. A month ago, he was filing for bankruptcy and had about 78 cents in his savings account. Shortly after, his wife sued for divorce and wanted his winnings.
In this article, Bankrate.com published an article on 8 lottery winners who have won the past and ended up broke or poor.
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All of us have told ourselves that we will not repeat the same mistakes like those past lottery winners, but it seems impossible to escape from the instant fame and fortune of winning the lottery. Suddenly, the number of relatives that you think you know about have gone up a factor of 5. Friends from high school or college suddenly are in touch with you. Calls from entrepreneurs about rich profit-making projects will go up the wazoo.
The chances of losing your friends and family will become extremely likely.
How to avoid all of that mess, or to try to mitigate the impact?
1) There has to be some way to avoid being photographed with that large-sized paycheck the lottery officials will give you. It is also ridiculous for them to put the full total of the lottery jackpot since the net amount after the lump-sum option and taxes is much smaller.
2) Identity change? Sometimes it may be best to change that phone number or address to avoid the flood of spam calls that you will be getting.
3) Choose the annunity payout instead of lump-sum. This may seem reasonable if you want to give yourself a short-period salary instead of everything at once. It will give you a better deal of handling your funds.
4) If you do pick the lump-sum payout, put most of it in a trust fund and impose some sort of lockbox mechanism, and set some sort of withdrawal limit on yourself. Good for setting some sort of financial responsibility.
5) If you are married, a revised pre-nup or marriage contract to reflect the lottery winnings. In this time of age, love will not help you if you win the largest lottery jackpot in history.
6) Any friend that suddenly appeared out of the blue must undergo a background check.
Anything more to add?