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You've Just Won the Mega Millions Jackpot: What Next?

Local financial services expert Jonathan Murray answers a few questions that will be helpful to whomever becomes $640 million richer tonight.

It's likely that tonight someone's life is going to change.

One lucky winner will become $640 million richer after he or she hits the Mega Millions jackpot.

But then what?

People (the 99% - kidding) have a difficult time managing "normal" finances. What is the winner going to do if they take the $462 million instant pay-out

Jonathan Murray, the senior vice president for UBS Financial Services, has a few ideas.

Murray, a Towson resident, has been named a top 1,000 nationally ranked financial advisor by Barron's since 2009. He's seen millionaires squander wealth, and doesn't want to see it again.

Q&A

 

PATCH: So say someone wins the jackpot tonight. What next?

“The first thing is to assemble a team. You need to quietly and discreetly assembly a team of trusted advisors. That team should include: an attorney with an expertise in trusts and estates, a CPA with an expertise in tax management, a financial advisors with an expertise in investments, a charitable expert—somebody who’s well-versed in charities in philanthropy.

The second thing is, with your team, is to construct a plan. This plan in my opinion should have as its objective No. 1 the preservation of capital. With this much money, this person is going to be the enviable position of not having to worry about growth. Therefore, they shouldn’t take any risk with this pot of money. It should all be invested with the objective of conserving what’s their for ... generations to come.”

PATCH: A fairly high percentage of people who win the lottery wind up going bankrupt in a number of years...

“I’ve seen it. I have seen people squander tens of millions of dollars. I’ve seen it with professional athletes as well as lottery winners. The biggest mistake this person can make is to make hasty decisions that aren’t well thought out with their money—such as buying real estate, businesses, toys, jets, things like that.

This is an awful lot of money we’re talking about here—so they’ll have to work pretty hard to squander it. I think it’s $400 million net, after taxes. The way to do that is to make hasty decisions with it.

PATCH: Did you buy a ticket?

(Laughter) “I did. I bought a ticket for my sons, just for fun. But I have absolutely no expectations. I did it for fun.”

PATCH: Sudden extreme wealth can pose problems for people who already have poor spending and saving habits. How much responsibility for developing a financially secure future should the winner place on his or her team, versus his or herself?

“If you have what I call the Three T’s then you can do it yourself and not surround yourself with trusted advisors. If you have the time, the talent and the temperament to be able to manage this pool of money yourself then go for it. But most of us don’t have those.

PATCH: Lump sum or annuity?

“I would strongly suggest, for most people, that they take the lump sum. If properly managed, this pool of assets can benefit generations and generations of their family and numerous charitable organizations if properly managed with certain trusts, estate planning, legacy planning. If you just tell them to send you an annuity you lose control of that asset for later generations. It’s a true gift for not only yourself but it’s a real gift for people hundreds of years from now who could benefit from your generosity and planning.”

PATCH: What kind of financial advisory team should the winner look for?

“Fee based, as opposed to a stock broker who’s going to charge commissions and transactions. You want somebody who can serve as your financial quarterback, who for a flat, transparent fee can handle all of the comprehensive holistic wealth management.”

PATCH: What is the most difficult part of dealing with sudden, extreme wealth?

“Keeping others away from it. Relatives come pouring out of the woodwork. Friends, you never knew you had, appear. It’s amazing how, especially how professional athletes, get pestered by others once they perceive that you have unlimited means. Sadly, too many people fall victim to that and feel pressured to give it all away. That’s the biggest challenge and the biggest threat.

PATCH: So anonymity is the winner’s best friend?

Absolutely. One hundred percent. They should just sit tight, keep their mouth shut, resist the temptation to scream it from the rooftops and slowly and methodically and quietly assemble your team and construct your plan.

PATCH: I’m just saying, I’m a reporter living in an apartment in Mays Chapel. It’s going to be pretty hard to hide the three Ferarris I’m going to buy when I win. But that’s just me.

Just get a big enough garage for them. (Laughter)

_______

What do you think or Murray's advice? Are you playing the Mega Millions? What are you going to do when you win? Tell us in the comments section below.

Harry Callahan March 30, 2012 at 10:51 PM
Let me give you some advice as well. First, tell no one. Like it or not, you are going to have to live as though you are in the witness protection program. Have your attorney claim your prize so that you can remain anonymous. This is important not only for you but for your family members as well. You don't want someone deciding "Hey, I'll kidnap this guy's grandchild and demand a $100,000,000 ransom." You and all of your dearest loved ones will have to assume new identities in another part of the country. Second, never "loan" money to ANYONE. If you do lend someone any money, you will be known as the greatest guy on the face of the earth and ZILLIONS of others will beat a path to your door asking for a handout. If you don't lend any money, then you will become the biggest SOB on the face of the earth. This is why you move to another part of the country and assume a new identity. Third, your new identity must be that of a person of somewhat modest means. Don't drive around in a Rolls Royce unless you are looking for trouble. Don't wear a ton of expensive jewelry, expensive clothing, or display any outward sign that you are truly wealthy. Think of it as being Superman. Assume the identity of Clark Kent. Then, as Superman, you have the power to help out any charity you like.
David Taylor March 31, 2012 at 05:12 AM
Well... Batman's already been taken. Thanks for the advice! http://www.washingtonpost.com/local/batman-brightens-spirits-of-hospitalized-children/2012/03/28/gIQAY3MmgS_gallery.html?tid=pm_gal
David Taylor March 31, 2012 at 05:22 AM
And it seems the winner may even be a local Patch reader (or editor) ... wow. http://mdlottery.com/640-million-mega-millions-jackpot-hit-in-maryland/
J.Moller May 15, 2012 at 04:06 PM
First off, I would not have my lawyer claim the money because I would want all the glory and envy of the great country we live in. I would allocate the money to my family and close friends to ensure them a comfortable lifestyle. You act as if this is American Gangster where you need to hide your trade. You won the lottery dude, use that cash. Invest wisely, spend as you please, and enjoy the life you now have.
Joey Smith May 17, 2012 at 04:42 AM
If I won the lottery, first and foremost I would donate a portion to people less fortunate. After that I would go on an insane shopping spree...do private jets come in hot pink??
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