Unexpected Millions: Managing Your Lottery Windfall

Prepare to transform a dream windfall into a lasting legacy as attorney Kurt Panouses
 joins us to chart a course through the exhilarating, yet treacherous, terrain of sudden lottery wealth. Hitting the jackpot might be a one-in-a-million chance, but squandering that newfound fortune is all too common. Kurt, wielding his dual expertise in accounting and law, equips us with an arsenal of tools to fend off financial fiascos. From the critical choice between lump sum and annuity options to the subtleties of sharing wealth and navigating office pools, this episode is a treasure map to maintaining your fortune for generations.

Chances are you've never considered joining two country clubs for the sake of privacy, but for lottery winners, such maneuvers are part of a new reality fraught with unique challenges. We explore the personal transformations that come with massive cash inflows, emphasizing the importance of a spending plan that secures your future while allowing for enjoyment. The 'six-month rule' is dissected, showcasing the art of balancing the thrill of a jackpot with the prudence of financial planning. Kurt shares poignant anecdotes and stern warnings, revealing that the most formidable opponent of a lottery winner is often their impulsive generosity.

As we sail towards the episode's conclusion, we tackle the dark underbelly of lottery winnings—the scams. Our gratitude goes out to Kurt, whose sage advice leaves us not just wise to the ways of wealth management, but also vigilant against those who prey on the unsuspecting millionaire-next-door. You'll leave armed with the knowledge to distinguish between legitimate lotteries and fraudulent fantasies, ensuring that when it comes to your ticket to paradise, you won't be left holding a counterfeit. Tune in to this episode to forge your financial savvy in the fires of fortune's favor.

Transcript

Speaker 1: 0:02

Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want. Now here is your host, ms Kim Chapman.

Speaker 2: 0:14

Welcome to a new edition of Money Matters. I am your host, Kim Chapman, do you play the lottery, hoping to win the jackpot of a lifetime? Picture this you've just checked your numbers and bam, you're a winner. You're on tight because winning the lottery or coming into sudden wealth is just the beginning of what can be a wild and crazy ride. What should you do first? How do you avoid becoming one of those statistics that say seven out of ten people who win the lottery become broke in just a few years? That's crazy. You wait all these years, you play the lottery, you win millions and you could go broke. Well, we're going to make sure that doesn't happen. Joining me today is attorney Kurt Panouses to discuss how to navigate a lottery winning or sudden death. I'm sorry, not sudden death, sudden wealth. Thank you for joining me, Kurt.

Speaker 1: 1:05

Good morning. Thank you, Kimberly. I'm glad to be here with you today.

Speaker 2: 1:09

Tell us a little bit about you, your practice and how did you transition into focusing on basically navigating, winning big winfalls and people that come into sudden wealth. What's an unusual focus for an attorney.

Speaker 1: 1:24

Yes, and I'm very lucky. You know you talked about winning the lottery. I just happened to do something at a certain time in my life, my career, that just allowed me to focus in on it. So my background really started out County major that became a CPA, worked for seven years in public accounting, the last couple of years or with a firm called Price Waterhouse, one of the what was called a big egg firm, a CPA firm just doing tax work for them, and I developed a sense of humor and you can't really be a CPA with a sense of humor.

Speaker 1: 1:59

So I went into law school and came out and practiced law for basically 35 years now, and over the last five years I kept getting calls from people who had won lotteries because I posted some of these wins on my website. And then it turned into well, maybe I should focus in on it. And the next thing I knew I was being brought in as a I guess, an expert, for lack of a better term. But we have to remember X is an unknown quantity and Pert is a drip of water in Greek, so but anyway, I was brought in to help people and I was brought in to be an expert with ABC News and NBC on the Today Show and all that. And as I posted these interviews, I found out that I was getting calls all over the country to help people and I just said, well, maybe I should focus in on this. No one else is doing it. So I've kind of made it the focus of my practice now and, even though I'm based in Florida, I help people all over the country that have major lottery wins and basically I'm there and my focus is to make sure that they set up a plan. This is so important for winners today to have a plan in place. We just got done with watching a Super Bowl on TV and I can guarantee you both coaches had a plan that all their players bought into. And it's the same thing with going to the lottery office to claim one of these big tickets. You need to have a plan and that plan needs to have some tax influence. That plan needs to have some legal influence and that plan certainly needs to know who the individuals are. And as a state planning probate attorney for all those years, I realized I developed a lot of those characteristics.

Speaker 1: 3:44

There's a wealth transfer In this case it's coming from the state lottery and you're trying to help an individual decide who and his or her family should also be involved, because taxes are involved. This is, I tell clients all the time this is the single biggest financial decision you will ever make in your life and you only have one chance at it. Generally, because most people don't win the lottery twice and I have had a couple clients that that's happened to but basically this is that big chance to do financial planning, not only for your life but if done correctly, if the amount is significant enough, it will be for generations to come. You can take care of your children and grandchildren as well with one good decision right now. And so having the experience I found has helped me get these people across the finish line, get them into the end zone in the fourth quarter or an overtime to win this game of life for them.

Speaker 1: 4:46

And so I put everything together the background as an attorney, the background as a CPA, accounting, tax and what's nice about it is because of that I am a one person show. I don't need to bring in an accountant to help us. I don't need to bring in a law firm to help us with the documents. I don't need to bring in a tax attorney to help us with the tax planning. I can look up the lottery laws in the individual states, know what we're supposed to do, put a plan together. It takes two to three weeks to do this, but we keep the circle of people that know very, very small.

Speaker 1: 5:22

And keeping the circle small of who knows, and doing it in an anonymous way which is really my focus, I think, is the best way and the only way to keep people from financial ruin, because I think anonymity is the key in doing all this work, to having a life after winning the lottery.

Speaker 1: 5:42

It may be somewhat of a lonely life in the sense that you're not going to be walking down the street saying, hey, I'm the multi-millionaire, I'm doing this, but you'll enjoy your life and we'll try to do whatever we need to do to keep people from understanding who you are and how you came across your money. Again, once someone wins, there's the claiming process and then it's life after the claim. We want to make sure that any houses that we buy are in Land Trust so that no one knows who the owner of the house is if they look it up. All these things come into play generation skipping, tax planning. Again, I can handle all that stuff, or make sure I at least review it for the client, so that the client, who's never had experience with this kind of wealth issue, knows that hey, there's someone there in their court helping them through the process. That's what I want to be, is I want to be the quarterback for these people and help them through the Super Bowl and get them to win.

Speaker 2: 6:43

Let's take it back to just even the basics. You just won the numbers and hopefully you don't have a heart attack and pass out. But once you realize that you could be a multi-millionaire billionaire, what are the first steps you should do after discovering that you are going to win a large sum of money?

Speaker 1: 7:01

That's the number one question for everyone, the one thing that you have to give some consideration to and I know it's the hardest thing for someone that's holding this little piece of paper in their hand Do I sign the back of the ticket? I think that that's their first question. Every single state lottery has on their lottery information sign the ticket, sign the ticket, sign the ticket. People you talk to say sign the ticket. The problem with that is is that doesn't give me, as the planner, the ability to really do a deep dive into the state lottery laws of that particular state, to see what the rules are, what the regulations are, and then to talk to the individual and say, hey, you want a billion dollars. You're probably not going to need a billion dollars, even if you live a lavish lifestyle. So who are you going to want to include? They're going to say, well, I have children, grandchildren, brothers or sisters, parents, whatever. Then what I like to do is I like to, over a period of time, keep asking them questions to find out how serious they are, what they really see their life looking like a year from now, after they have this wealth, so that I could paint a picture, because I want to have a clean slate so that if I wanted to paint anything on this canvas, I can do anything. If they sign the name on the back of the ticket immediately, that may hinder what I want to do or what I want to do for them. So I tell people I know it's hard, but please don't sign the back of the ticket, don't mark the ticket in any way. Take a good picture of the front of the ticket and the back of the ticket, because that's all I or anyone would ever need to help them. I tell people, as corny as this may be, maybe put the ticket next to your face and take a selfie of your face and the ticket so that way we can clearly read the numbers that you had that particular winning ticket in your possession on this particular date February, march, whatever the date might be that you had the ticket in your hands and in possession and then make a copy of the front and back of the ticket and put the ticket in the safest place you know. I say go to a financial institution and put in a safe deposit box. Be careful, because the paper is very thin. Depending on what you do with the ticket, it could fall apart. I've seen lots of issues with tickets so. But I just say don't sign the back of the ticket, take a copy, take a picture, put the ticket in a safe place, don't tell anyone and then call some professional to help hopefully me but call some professional to help you with the process and go from there.

Speaker 1: 9:40

If you absolutely cannot live with yourself and you have to sign the name, I would say leave room on the top of your name, because most state lotteries allow. They will take the first name on the back of the ticket. So write your name very small on the back of the ticket, on the lower part of it, so that way the attorney can put all the basic information depending on how you're going to claim it. Again, I like to take a look at the Lottery Act of the state, look at the laws of the state. I like to look at who the client is thinking about helping, because they only have one chance at this. So I want to paint the right picture for them, put the plan together.

Speaker 1: 10:22

Again, I look at something I kind of call it goals on results oriented. So that's why I asked them where do you want to be a year from now? How do you see your life a year from now, and so I want to incorporate that in. So I like a blank slate on the back. So first thing I tell people don't sign the ticket. Make a copy, have a, take a picture of you and your face holding the ticket next to you and put the ticket in a safe place and then try to keep the circle of people that knows as small as possible and start thinking about where you want to see your life a year from now. And that's really what an attorney should be helping you with.

Speaker 2: 11:01

You mentioned not to tell anybody. You know I'm pretty good at keeping a secret, but I cannot imagine how hard it would be to just walk around with that information in my head. So is there? If I'm married, should I? Am I even required to tell my spouse? Or are there people you're required to tell? And are there people maybe that are just red flags? You definitely should not.

Speaker 1: 11:23

Well, you don't have to tell anyone. First of all. That's number one. Number two I think it's prudent to tell your spouse. You know, obviously, if your marriage is having some issues, you may want to discuss it before you tell your spouse, like I had, every state's different with laws as far as separation. I did have a client out in California, which is a community property state. When we looked at the law out there it basically said, yeah, if you're already separated, you're not divorced, but if you're separated, that's the day of separation of assets. So I told the person you're holding a winning ticket. You likely, if you do this right, you know, can keep your spouse out, even though you're still legally married, but you're not divorced yet, but you're separated. So you know, I think telling your spouse is still a good thing to do I wouldn't tell anyone else.

Speaker 1: 12:15

And if I did tell someone else, or wanted to tell someone, because I wanted to bring them in and you know this, that's also a big issue, because I had a client who who wanted to help his brothers and he he said, well, you know, I want to give them, you know, five or $10 million each. And I said, well, if you give them that kind of money, it would be considered a gift and it would have gift acts associated with it. So maybe if we incorporate them in the wind as part of the trust or a small percentage, we can get them the same money. But before we do that let's send out a non-disclosure agreement. And so we actually sent out a non-disclosure agreement for them to sign and send back with attorney representation, and I called the meeting as to why we were meeting, and actually the brothers thought that their, their brother, was sick and was dying and that's why the meeting was being called.

Speaker 1: 13:05

But it was really being called to find out how stable their relationships were with their, with their spouses. Because I insisted to say, hey, before before we give them money or put them on the ticket, let's not surprise them with it, because that surprise your surprise might be just a horror story for them. So when we got them both on the phone, one had already been separated but didn't tell anyone anything about it, and the other one had been living apart but never got divorced for like 10 years. And so you know we had to restructure what we wanted to do to get them the money that the brother wanted them to have. So tell your spouse if your marriage is in good shape. You're not separated, obviously. But really try not tell anyone else. Some people tell their adult children. Again, depending on the dollar amount, if you went a million dollars or two million dollars, probably not that big of a deal, but you went a hundred million dollars or a billion dollars, it's a big deal and we should talk about it first.

Speaker 2: 14:06

Now, I mentioned, I'm good at keeping secrets and the only time that I actually get a lottery ticket is when it's like what? A billion dollars? Because 40 million obviously isn't enough. And you know we do those office pools. So what happens when you have an office pool? So you've got 10 people that have put into this lottery ticket and they've just won. I may keep it a secret, but what about the other nine? What kind of issue are we faced in?

Speaker 1: 14:29

Well, there's been lots of litigation on these office pools, and what I tell people first off is, when you're talking about an office pool, the word there that's important is cool and, as we all know, pools have a shallow end and they have a deep end, and if you could call it that deep end, it could be disastrous. So the problem with office pools is there's always someone that got left off. Or you had been doing a lottery pool for a while and went on for like 10 weeks while the jackpot was getting bigger, and then one day someone doesn't show up to work because they're sick or they're out of town on business, and so they don't physically put in the money, or someone doesn't put in the money for them, and so now they're left off. Or each drawing is that a new office pool? In other words, you buy 20 tickets for the office and one of the tickets wins $10. Well, what happened to that $10? Did that get disseminated to everyone 50 cents each? Or did they say we're rolling it over, so they roll it over and they roll it over, and then someday someone doesn't put in their $10. And so they're left out, and so there's plenty of litigation on those issues.

Speaker 1: 15:47

Normally, what happens is that person that gets left off or isn't included that gets angry. They will file some lawsuit that puts a hold on all the funds and so no one gets any of the money. They eventually, in almost every case that I've seen there's several cases that are posted on that, but almost always they eventually get something in settlement and in the meantime everyone didn't have access to the money for three years. So if you're going to have it off of school, have some rules, have everyone sign off on it, make sure that there's full disclosure of the tickets that are bought for that night and who's included only, and make sure that it's really documented. Well, you know, that's my only suggestion. I don't like them. I think that there's always someone that gets left off, that gets hurt, and once they get hurt they find an attorney, and if there's a hundred million dollars sitting out there, you're going to find an attorney that will represent you.

Speaker 2: 16:48

So I think my takeaway is I need to leave a $10 bill in my drawer just in case I'm absent one day and they're going and they're doing a lottery pool at the office or and or make sure that the rules say that you can have a surrogate, but you each person has a surrogate to put money into it.

Speaker 1: 17:03

So that way, if you're absent for that day, your surrogate has agreed to put in money for you. So that way you're included and you do the same for them.

Speaker 2: 17:11

Wow, it really gets technical. So what are some different options for claiming the lottery and how do how do they each affect your taxes and financial planning Also very important and Unfortunately I've had some of these issues that came up and their heartbreaking issue.

Speaker 1: 17:29

I got a call and not too long ago, from a young lady who there was a 30, some million dollar lottery in her states that the opportunity To claim it you know every state has rules and the opportunity to claim it after six months. It was you're out of luck and Because she won and because she was so scared, she didn't tell anyone and she kind of put the ticket away and then moved, because you know that was her part of her plan is I will move first and then I'll go in to claim it and get some help with it. That's what she was thinking. Because of that, the six months went by and Then she lost the ticket and so there's a 30 million dollar lottery win that went unclaimed and she was calling me to see what can I do and unfortunately, most states say you need a ticket not not every state, but most. For now all the states say we need to see a winning ticket and you need to claim it timely and those are basic rules. Now every state has different rules about how long you have to claim a Mega million Powerball or it, one of those scratch off games. So you have to look at your state to see what the rules are for the individual games and then comply, and so you know. That's why it's important to to act reasonably quickly after you notice that you have a win, but doesn't have to be done overnight and actually Just like in a state planning when a, a spouse died and I'm talking to the surviving spouse and you know everyone gives them suggestions do this, sell, sell your house, move to a smaller house, do this. Do that. I always tell clients in the past Let the roller coaster come to a stop before you try to get out. Okay, and the same thing, same thing with with lottery. You know, let those initial emotions Pass before you start acting on it, but don't let it go too far. So every state has different laws. You have to check those things. The key also in a lot of states is it's many times you have 60 days To claim that winning ticket, that Powerball ticket or that mega million ticket. You have 60 days to claim it if you want lump sum. If you go beyond 60 days, then it's automatically an annuity. And what happens is With states these days, they can own their governments, can only invest in certain types of investments and Typically a state that runs a lot of rates, called an enterprise fund.

Speaker 1: 20:07

It comes back from my auditing days when I did governmental audit work my initial early days of being a CPA. But these Programs that generate income, like golf courses and all these things, are called enterprise funds within the government, and so the investment Limitations are typically treasuries. So it's important to take a look at the treasury rates, and most of them use two year or five year treasury rates. Today, those treasury rates, if you look them up, those are like four and a quarter, four and a half percent. They may have gotten close to five percent in the last year. So back in 2020, 2021, those treasury rates were under a half a percent, half of one, for less that less than half of one percent. Now they're four to five percent. So those, those treasuries, are what they can invest in. So they need, they need to know Okay, it's the person taking the lump sum, or do we invest this into?

Speaker 1: 21:03

Do annuity to give them the 20 or 30 year payout, whatever the state laws? So you have a limited period time to make certain decisions. You need to act fairly quickly, but don't wait too long and don't do what that one person did that ended up losing 30 plus million dollars just because she wanted to move and then misplaced the ticket and didn't know where it was. And yeah, I mean there, she was sad she's. Luckily she had a lot of faith, luckily she, you know, had been in the service and experienced a lot of things and in her time at serving our country. But, yeah, it's still still heartbreaking when you hear it. But that that that decision between the annuity and the and the lump sum payout is very key and many states you only have 60 days because of that treasury rate and the difference right now is the amount of lump sum. You know, I had a client that won over a billion dollars in 2021, january of 2021. So their, their payout, their lump sum payout of that billion dollar ticket was like 776 million before tax. Today, if someone won a billion dollars, because of the interest rates, the treasuries being where they are and inflation affecting basically the interest rates, that payout might only be $480 million. So difference between 780 and 480 is Just a couple of points of interest rates. So, obviously, taking a look at your options Again, bringing someone in with some experience, one-time opportunity to do this right.

Speaker 1: 22:43

Make the most of that opportunity. Yeah, I tell people all time. You know there's a lot of good quarterbacks that get their teams to the to the Super Bowl, but who do you want Quarterbacking your team? Do you want a Tom Brady? Do you want a A, a Mahomes quarterback unit? Or do you want, like a Marcus Mario to, who was a Heisman trophy winner but hasn't gotten his team ever to a Super Bowl? So you get this one opportunity. You want to make sure you put the right team together and act with a lot of. You know these are. These are decisions that the average person that buys a ticket has no idea of and you know All they start seeing is okay, I can have a new house, I can have bill as. I can fly anywhere I can. I can help out charities. You know all these things change after they win.

Speaker 1: 23:28

I've had clients that have one major amounts of money and, unfortunately, the way we do it being anonymously, they actually have to live kind of like a double life. You know I have. I have a client that loves to play golf and plays golf almost every day, but he had to join two country clubs. He, you know he's retired. He joined the one exclusive country club that only he goes to when he wants to really enjoy himself and if his friends come in town he goes to, you know, and every day, every day person's country club and plays there, because he doesn't want some friends, even though that he won a couple million dollars. So again, it could be a very sad life, it could be a very quiet life, but whatever you do, you want to make sure that you have a life and I think claiming anonymously and putting a plan together is really important than that. I've probably over answered your question, I'm not sure.

Speaker 2: 24:20

So no, you did just fine. So what are some common mistakes that lottery winners often make, and how can they avoid falling into those traps?

Speaker 1: 24:28

Well, I think people have a tendency, when they know that they won, say and I've seen it on TV when they talk to people, hey, if you win, what are you going to do with the money? Well, they all say, well, I'm going to keep a third, I'm going to give a third to my family, I'm going to give a third to charities or to my church. And it's sad because when I've talked to people like that after they won and we start the process, they have a tendency to say, ok, well, maybe I don't want to give that much to my family, maybe I'm not giving that much to charity. We start talking about what are the options to take care of charity. There's many different ways that you can do charity. A lot of these people think they're going to set up a foundation and when I tell them that, I say well, the foundation requires a lot of work, it requires effort, it requires people working in a foundation, family members, or are you going to do this? No, I don't want to do it. I just want to give money to it, but I want my family to run it and control it. Well, it requires requires tax returns, it requires someone taking a look at the investments. It requires a distribution every year of so much this percentage.

Speaker 1: 25:39

And so a lot of people, I think they start talking this game of what they're going to do and they get so far ahead of themselves that they don't know how to come back from it. And so then they find themselves victims of their own exuberance and they just say, ok, well, I'm going to do this, I'm going to do this, and then, before you know it, they've not put a plan together, they've not followed that plan and they find themselves in a financial position that they didn't expect and they think money is going to get them out of it. Well, a lot of times money doesn't fix things, and I learned that through my proxy law with a couple of law firms that wanted to do things a certain way and I objected to it and they ended up after I left going the wrong way and ended up disseminating. So I think if someone was to follow a proper plan, if they win over $10 million or so, if they can live with an ability to spend 3% to 4% and not touch the principal, I think that they would be living a nice life. If they start spending more than 3% or 4%, I think they're going to find themselves in a difficult position at some time in the future because they're overspending.

Speaker 1: 26:58

And the other thing I tell people is no major decisions financially for six months. Let's get through the first six months and see where we are. And, yes, you can pay off your mortgage. Yes, you can get yourself a new car I'm okay with that but nothing else. Maybe pay off a couple of credit cards if you have them, but do nothing else for six months.

Speaker 1: 27:20

No major purchases, no major gifts to anyone. Let's six months go by and see where we're at and then after that you can probably put a plan together for the next year and do a lot better. So I think just that over exuberance, sometimes thinking that you're multimillionaire, that you can do everything and change your life, I think really gets people in trouble. So again, stay with the plan. Let's go six months, no major purchases. Let's get on a plan that we're spending 3% or 4% of the winnings every year because hopefully the investments there conservatively to get them that 3% or 4%, and at the end of the year it's like the year went by and I still have all my money and I'm in good shape because I've learned.

Speaker 2: 28:08

Has it been difficult to get your clients to agree to that six month rule? Because we have water cooler conversations and that's all people talk about is I'm going to go buy a new house, I'm going to buy a jet, I'm going to buy a car, I'm going to buy this and that. So to have to restrain yourself for six months just seems almost outrageous. So is that a pretty easy task, or is it something that makes your job a little bit more difficult to keep them reined in and holding on to that money for that time period?

Speaker 1: 28:34

You know, a lot of it has to do with the amount of money that they want. Someone wins a couple hundred billion dollars. It's going to be real hard for me to convince them that it might be a good idea to stay at their job. So a lot of people say, well, I'm going to quit. Or I've had people that have won 500 million that say I love my job, I'm going to stay at my job. And I'll tell them listen, I give it three months, tops two months likely that you're going to continue to go to work and you're going to listen to what your boss said to do. Then you're going to look at your bank account and say I ain't listening to him anymore and I'm out of here. It's life.

Speaker 1: 29:11

But in the old days if someone won a million or two million dollars, that's a nice amount of money. That's not life changing and you know, we know, we know it might need. You might need in most states four to five million dollars just to retire a little bit at this point in time in a state of our country right now. But I think you win a million or two million dollars If you, if you quit your job, you lose healthcare benefits. Well, if you have a major medical problem and you don't have health insurance, today, you might find yourself in a very difficult situation that you have a million dollars in the bank and it's going to go to your medical bills within six months, and then what do you do? You quit your job. So it depends on the amount of money and again, you have to treat that two million dollar winner different than the hundred million dollar winner. The hundred million dollar has more cushion but that's why they need a different type of plan than that two million dollar winner, that two million dollar winner. The plan for them is a lot simpler. It's kind of like all right, I have, I have funded my, my IRA or my 401k in advance, essentially, but I'm not going to touch that until I'm retired at the age of 65 or 70. And then I have a nice, comfortable retirement a hundred million dollar winner. They can retire that next week. So again, it depends on the amount and it's all part of putting that plan together. And I tell people listen, I'm here for you, I will help you beyond that claiming period. But you know we need to make sure that you're following the plan.

Speaker 1: 30:45

The plan worked to claim the money. The plan worked to get you established and to get your family in a good, a good state. Let's continue with the plan. Let's not let's not change, let's not modify it. I mean, we can modify it to some extent, but let's take a look at like I just had a client not too long ago with a financial consultant that we met with and the client made $9 million in income that year $9 million. And then we looked at the whole thing of what they spent and they spent $4 million. They lived a comfortable life the whole year, did everything they wanted to do, travel everything. They spent $4 million. So they made $9 million. They spent $5 million of income, left Income Forget about the fact that the portfolio is still there and so we said, okay, is there something else that we want to do? Is there something now that we want to change in our life? Maybe it's time to start flying private planes, as opposed to getting an airplane to fly in first class. Maybe we should try that for a year to see if that was a good thing or a bad thing. Again, having that plan, following up on that plan, seeing the results of that plan every six months or year at a time is extremely important to having someone live their life comfortably.

Speaker 1: 32:03

And again, it all comes down to anonymity. As far as I'm concerned. If you're anonymous and know those who you are, you have less people asking for money. You have less people asking for donations.

Speaker 1: 32:13

I've had clients who, because I'm their representative, I get the letters.

Speaker 1: 32:18

And I'll get a letter from someone out west that says hey, I need this money for my family. I lost my job. I did this. It's a handwritten letter. It tugs at your heart. You want to help out. And so I'll talk to the client and go hey, listen, I got this letter from this person. You're probably not going to want to respond to it, but this is what it said. And then, a week later, a person sends the same handwritten letter to me, addressed to them, to the winners. But I get it and it says well, you didn't answer my request, so I'm going to take my life, I'm going to kill myself because I have nothing to live for, and that's what people have to live with as winners. They get these types of requests from people and it's hard to say no, and so you don't know if they're real, you don't know if they're made up, if it's a scam, people become targets, and so you have to have someone that shields you from that, and that's kind of like what my practices were built on.

Speaker 2: 33:15

So I think the burning question is how can you really remain anonymous? Because I know there are some states, such as Louisiana, where they will. You know they claim that they're required to put your name out there, to publish your name. I know some states, you know they allow you to stay in the incognito, but in Louisiana, if I won the lottery, I would want to be anonymous. I would want to be, you know, keep that information a secret. So how would you be able to help me with that?

Speaker 1: 33:39

Well, again, every state has different rules and obligation and the question really for the state is do they have to be transparent because of the laws of that state? And in some states it's written into the law that you cannot claim a lottery as a trust or a limited liability company or some form of entity. They do not allow it. They say that the winner must be a natural person natural person and that's what it says. And you know, obviously, if you win a lot of money it's a different situation and I always tell people that, even in those states where it says you have to be disclosed as a natural person, let's see if we can take some steps to get around that. You know, sometimes I don't like to, but sometimes I like to put a plan together that includes bringing in a litigation person, a litigation attorney, to help us go through the administrative law provisions to say how important it is for the individual to be anonymous. Like, let's say, I had someone that won and they were in their field of what they did and they were a deputy at a prison, for lack of better. You know they were there. Well, the last thing you want for that person's safety is to disclose that they were a lottery winner. When they have to go into a prison on a regular basis or they're in law enforcement because they could be compromised, so for their own safety and the safety of the public, you may say, hey, this situation is different and this is why we need to keep the person anonymous. You know, there's no reason that they can't play the lottery, but so you have to look at the individual circumstances of the individual.

Speaker 1: 35:27

The other thing is I'm looking right now at your Louisiana claim form. It's a one-page claim form and in the claim form about midway down it says I am claiming for a group and it says attached form 5754. Well, 5754 is an IRS tax form and if you pull it up and look at it, it basically says this person is claiming it or this entity might be claiming it, but the winners are really these people. So that's an IRS form and so I think even in those states that require the person to be a natural person that claims it, I believe that there's ways to get around that to protect at least most of the people Like I typically act as a representative of the group because I am a natural person. So I have a document put together for the group sign that says Kurt is the representative of this group and he will claim this for us. So I'll be the person that will be identified to protect the other people in the group, because normally says only the person that gets paid for the group or for the trust of the LLC that has to be disclosed. So I believe that there's ways around. I don't want to say around that we're circumventing the rules, because we're not. We're trying to play within the rules.

Speaker 1: 36:52

And this is where I always like working with every state lottery has a lottery attorney who they make decisions for the lottery. So as the attorney for the group or the attorney for the trust, I reach out to that person and say listen, this is what we would like to do, what are your thoughts on it? Get them involved as we put the plan together and, if need be, if I can't work an agreement out with that person again, I'm not going to worry about it. It's a million dollars. I'm going to tell the client hey, you don't need to go through all these hoops. Just you know the law is what the law is. Just go ahead and claim it.

Speaker 1: 37:27

But if it's a hundred million dollars or billion dollars, it's worth taking some extra time to see what we can do to make sure everyone is okay with our plan. In that particular case, I might even get the litigation attorney to go with me and meet with the attorney general's office who the attorney that's in charge of lottery and gaming to see if we can't get them to agree to our plan. And I've done that before with certain states to keep people anonymous Because, again, anonymity is the key. Being the plan together to protect anonymity is the follow-up.

Speaker 2: 38:03

Well, as we get ready to wrap up, are there any reliable resources or support networks that can help individuals navigate into this new potential lifestyle?

Speaker 1: 38:13

Yeah, you know, I think that they're. What people don't understand is the lottery websites that they live in they buy their tickets is really have some great, great materials, but they're hidden, you know. You just have to find them. You know, obviously, when you look at someone and I happen to look at your laws there because I knew we were going to be talking Louisiana, for instance, has a four and a quarter state income tax. Okay, that's four and a quarter. It may not seem like a lot, but when you start acting on a billion dollars or a hundred million dollars, that's a lot of money. That would pay the attorney fee. I'm joking. But basically, if you're in a border area and you have the choice of do I go someplace like Texas that may have there may be income tax free to buy my ticket, or do I cross the border and go into Florida where it's income tax free? Should I try to be buying my tickets there when I get the option? Probably that's the number one thing, because you don't have to be a member of that state to buy a lottery ticket. You could be passing through them. Buy a lottery ticket, be a winner. So you're based on the laws of where you're claiming it at, but you're also based on the laws of where the ticket winning ticket was purchased, so you can save some money doing that.

Speaker 1: 39:35

But look at the lottery website. There's always resources. There's always something called resources. Every state's lottery website has this information on it resources or they have questions. Go through those things. Read through them, because that's what I do. That's the first thing I do when someone calls me from a state. I pull up their website. Go through all these resources. Try to look at the lottery act. Every state has a lottery set of rules and acts and procedures and they're hidden in these websites, and so you can go there and get a lot of information.

Speaker 1: 40:12

Outside of that, there's always things that are written, and not too long ago I had a gentleman interview me and I was fascinated because I was just like when he called me, he said, hey, I'm writing a book on the lottery and I want to include a lot of different topics, but he was a hockey player, I guess growing up, and so sports was important to him. But he wrote this book and he sent me a copy of it, and while there's a whole chapter in the book that's devoted to things that I discussed with him, which was kind of cool. I really, when I went through the book, I found the book to be a very helpful book in understanding not only what the individuals go through and some of their emotions, but also what the states also go through as well. And so the name of this book is called Winning Numbers and it's called the Deep Dive into the Lottery and Luck. The paperback I think you can get it on Amazon, and the author is this guy, jeff Kopetus, c-o-p-e-t-a-s. Again, that book I thought was really, really good.

Speaker 1: 41:23

There's a lot of stuff out there with the states because these scratch-off games. They're so confusing for people. I get so many calls saying hey, I thought I had a winner, but the state's saying I don't. I want to have a class action suit, I want to sue the lottery. I've played for six months and I haven't won. Or I bought 10 tickets in a row and none of the tickets were winners and it says one out of every five tickets and everyone wants to sue the lottery, sue the lottery. So there's a lot of documentation out there for people to read up on lawsuits against the lottery or whistleblowers. But I think Jeff's book did a great job of talking about it. But other than the actual lottery act and the website and that book, I think looking at what your options are for past winners, looking what did a past winner in my state do and is there any follow-up on their situation Were they disclosed? Were they not disclosed Just taking a look at the history of your state with former winners, I think it's also pretty good.

Speaker 2: 42:27

Some really good information and, of course, your expertise is not just limited to lottery winnings. You may inherit money. It could be from gambling. There are lots of different sources that you can help individuals with. So how can our listeners reach you if they do come into some sudden wealth and they want somebody on their side that can help them navigate this winning-win fall?

Speaker 1: 42:47

Yeah, that was a good point that we really didn't discuss a lot about. There's different types of sudden wealth and that's actually important. When someone wins or comes into money, versus someone that inherits money, it's a different mindset. When you win a lottery, you're a little bit more apt to say well, it's free money. If you have someone that passed away that gave you money, you may say this is more of a savings. Your mindset's a little bit different. I lost someone to get this money. I lost a family member, so I'm going to be a little bit more responsible for this. As opposed to oh, the lottery, that's just free money.

Speaker 1: 43:27

Or someone that sells a business and has a whole bunch of money. Their mindset is okay, I worked all my life, I earned this. I want to still dabble in gains and losses and the business opportunities. So their investment decisions are different, their mind frame is different and the investment people that work with them need to understand that and treat them differently, because a lot of these investment groups that come into helping these people with large amounts they just think, okay, well, we need to generate losses to go with the gain. And it drives me crazy because if I have a client that has $100 million, I might say hey, listen, you don't have to take any risk whatsoever, you'll always have your $100 million Live off of just basic, basic interests. Do that and you'll never go through this money. So it's a different mind frame and their abilities to want to spend are different.

Speaker 1: 44:24

It's always good to make sure you bring someone in with experience or the person. You might have a really good relationship with an attorney in your area and say this is the attorney that's going to represent me, but I'm going to tell him or her I want to bring in this other attorney to be part of our team to really help us through the process, and I've done that as well. So the way to get a hold of me is basically obviously, I still have my legal website out there, which is curteatpenousislawcom P-A-N-O-U-S-E-S. My last name, law L-A-W dot com. That's one way. But I also have a website out there really devoted to the lottery, and it's lotterylawyercpacom all one word, lotterylawyercpacom and that's the one where I really focus in on the lottery and what I've done in the past and some different options for people to help them through the process.

Speaker 2: 45:18

Well, I definitely want to thank you. This has been some really good information. You gave me a lot to think about, even though I don't buy a lot of lottery tickets. So I want to thank you for sharing your invaluable information and your expertise. And we'll have to have you come back because, of course, there's so much more to talk about, like you said, if you come into wealth, and there's so many other topics to talk about, especially prizes. People don't realize that if they win a prize, that there's money involved and that nothing in life is really free. So we'll have to have you come back. Thank you again, Kurt. Thank you so much.

Speaker 2: 45:52

Lottery scams are unfortunately common and scammers often target individuals who have recently won or are seeking to win the lottery. Here are a couple of tips to help you avoid falling victim to a lottery scam. First of all, verify the legitimacy. Only participate in lotteries run by legitimate organizations. Beware of unsolicited communications. Be cautious of emails, letters, phone calls, texts claiming that you've won the lottery, especially if you've never even entered or bought a ticket. Don't pay any upfront fees. Legitimate lotteries do not require you to pay upfront fees. That is kind of key. It's kind of you know if it sounds too good to be true. It probably is. And then finally check out neighborsfcuorg or slash financial education to learn more on how to use the money you have, make the money you need and save the money you want.