5 Common Mistakes to Avoid After Winning, Experts Warn

Winning a large lottery prize can be life-changing, but experts warn that many winners make costly mistakes right after their win. How you handle your prize initially is crucial to preserving your wealth and avoiding unnecessary risks.

The first critical step is to sign the winning ticket immediately. According to the South Carolina Education Lottery, the person who physically holds an unsigned ticket can claim the prize. Experts emphasize using official lottery validation tools instead of relying on store clerks, as there have been cases of stolen tickets. Signing your ticket in ink and keeping a photo or copy of it can prevent fraud and loss.

Storing and Securing the Ticket

Once signed, it is vital to store the ticket securely. Financial planner George Gagliardi compares holding a winning ticket to carrying millions in cash. He advises placing the ticket in a fireproof safe, lockbox, or bank safe deposit box. This helps protect the ticket from theft or damage.

Keeping Quiet About the Win

Experts also recommend keeping news about your win private. Revealing your success publicly often attracts scams and unwanted financial requests. Some states require winners to disclose their identity, but consulting a financial advisor and attorney can help set up trusts to claim prizes anonymously.

Taking Time Before Claiming

Winners typically have months to claim their prizes, so rushing to do so is not advised. State Farm advises building a support team of legal, tax, and financial professionals first. This approach helps avoid costly mistakes regarding taxes, investments, and managing newfound wealth.

Choosing the Right Payout Option

Powerball winners must choose between a lump-sum payment or an annuity. The lump sum offers immediate access to about half the prize, while the annuity pays annual installments over decades. Your age, risk tolerance, and estate plans should shape this decision. Certified financial planner John Loyd stresses the importance of avoiding emotional decisions and consulting experts before selecting a payout method.

By avoiding these five common pitfalls, lottery winners can better protect their fortune and make sound financial choices for a stable future. Taking deliberate, informed steps early after a win maximizes the chance of long-term success.