Lottery winner

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Feb 17, 2011 4:55 pm

Landed a lottery winner. 2.2 million, 58 years old, African American woman, single, one son. Seems pretty levelheaded on the initial meeting but not knowledgable about basics of investing and finances.

Haven't talked investments yet beyond explaining what a CD is. Talked her out of giving 250k to her son until she talks to my tax attorney.

Any experience, tips, suggestions, horror stories?

Feb 17, 2011 8:41 pm

I just landed one too.  He won 10M.  Unfortunately there's only 500k left to invest and he'll likely run out in retirement...  There's a horror story of want not to do.

Feb 18, 2011 12:54 pm

Be prepared for a client that constantly withdraws money, acts foolishly. I worked at a very large bank before, and virtually every colleague had one of these. Me, I had a guy that won a couple hundred thousand...

I'd say this for sure, make sure you set the account up so that you get paid not totally front loaded. Otherwise, you'll have one really great month, then 36-48 months of misery servicing the account.

The big gift, knee jerk reaction, ....person is already doing their best to f things up.

If you REALLY, care, you might contact the lottery commission in the state, and get some educational material for the client, to help protect their winnings. My State has stuff like that...

Remember too, a person like this probably has a higher potential of becoming a compliance problem to you in the future, might try to blame you for fees, losses, lack of advice. So, document, be careful, yada yada....

Mar 5, 2011 10:55 am

Is there any way to gift money to a son or family member without incurring the gift tax. We've sat down with a tax attorney and explained the 13k limit and the ability to backdate it 5 years, but I suspect she wants to do more.  The son has been joining her at meetings, saying the right things but probably is a knucklehead.

If she put the son on an account as a joint or co-owner -- let's say an annuity -- would that scratch this itech without causing problems with the IRS?

Mar 5, 2011 11:01 am

She could just pay some of his bills for him, etc. 

Mar 7, 2011 2:53 pm

Get ready for that new Escalade she or her son will soon need!!!

Mar 12, 2011 7:42 am

How bout college for grandkids. Or a set of DUB spinners.

Mar 18, 2011 11:40 am

the double entendre of the month. unbelievable. http://bit.ly/dViFkY

Apr 1, 2011 10:58 pm

I just landed one too.  He won 10M.  Unfortunately there's only 500k left to invest and he'll likely run out in retirement...  There's a horror story of want not to do.