So you didn’t win last week’s mega-Powerball jackpot? Well for a select few ticket holders, they had possession of the golden ticket. This includes a winner in the state of Tennessee. With such a large sum of money to be acquiesced by the jackpot winners there has been much talk of what one would do with it. There are some tips that are recommended for lottery winners that, coincidentally enough, are applicable to asset division in a Tennessee divorce.
According to a Camelot Group study, 44 percent of those who have ever won large lottery prizes were broke within five years. Many wonder how this could be? Since divorce also leaves divorcees with a change in financial situation and sometimes large lump sums of money, this is pertinent to them as well. How can one avoid a situation of loss of wealth or even bankruptcy after a radical change in financial status?
It is recommended that the first person that you inform about your winning lottery ticket is . . . your financial planner and an estate attorney. But most people call a friend, family member or spouse about their winning ticket before speaking with their financial advisor. This is also the case for those thinking about a divorce. It is advised that those contemplating divorce get a grip on their financial situation, including the valuations of all assets, liabilities and commodities before jumping headfirst into divorce proceedings.
This can help prevent a situation that would leave a divorcing party in a misinformed or inadequate financial position for deliberations or discussions. If a person going through a divorce receives a lump sum of money such as from the sale of a house, it is important to remember that the money is smaller than it seems. Same as large lottery winnings, the money is finite and will not last forever. Understanding personal financial situations can better prepare both divorcees and lottery winners for the changes ahead.
Source: fortune.com, “Why so many lottery winners go broke,” Ric Edelman, Jan. 16, 2016