Millions upon millions of Americans dream of hitting it big every time a huge lottery jackpot hits the headlines. Fantasies of fancy cars, foreign travel and life in a mansion are hard to resist.
The reality is that the odds of winning are far less than the chances of being struck by lightning. And if you do happen to win, well, there’s no guarantee you’ll be able to stay on Easy Street for good.
The Internet is littered with tales of fortunes won and lost. A recent example, written about on ThinkAdvisor, told of a $168 million lottery winner who went bust. The problem, it appears, was in the winner’s choice of financial advisor. And that, experts say, is a big problem.
Holding on to the money can be harder than winning it for some people. But there are ways to improve your odds, according to Susan Bradley, founder of the Sudden Money Institute in Palm Beach Gardens, Fla. The institute counsels people as they navigate through major financial changes brought about by major life events, such as divorce, the death of a spouse and winning the lottery.
“You need to create some space.” Bradley said. “You have a whole new career, a whole new life. Most people don’t understand this.”
Most lottery winners, Bradley said, are so excited they are ill-equipped to make major decisions. Add to that the lack of sleep during the first couple of weeks after winning and there’s a recipe for disaster.
Lottery winners need the space, she said, to prepare for their new life. She listed several steps to that are essential to take before cashing in the ticket:
- Change your phone number. Give out the new number, even to your cell, to only those closest to you.
- Find a financial advisor. Interview prospective advisors to find one who has worked with people going through emotional and financial changes. Winners should have their prize wired to the advisor. This allows some anonymity from the financial predators who will begin circling when word gets out. Bradley noted that this first advisor doesn’t have to be the “be all and end all.” You can always change advisors later.
- Winners should also consult an estate attorney.
- Make a list of the emotions you are feeling. The exhilaration and anxiety can be overwhelming. The list can help you identify them.
Even the most robust of winners can succumb to the stress. Bradley notes one winner she counseled who “wound up in the hospital for stress. It blew his circuits. And he was a strapping guy in his 40s.”
All this got us to wondering about the stories behind those who won a mint and then lost it all. Some of them forfeited more than the cash; they even lost their lives.
Check out Top 10 Biggest Lottery-Winning Losers:
10. Amanda Clayton, 2011
Winnings: $1 million
($1.03 million today)
Hitting the jackpot doesn’t set you up for life, at least judging by Clayton’s behavior. Clayton was young, just 25, when she struck paydirt on a game show run by the Michigan lotto. Winning a million dollars didn’t stop her from applying for, and receiving, food stamps, which led to a fraud convction by the state and a nine-month probation. Alas, Clayton did not live that long. She died in September 2012 of a possible drug overdose.
9. Evelyn Adams, 1985 and 1986
Winnings: $5.4 million
($11.6 million today)
The New Jersey resident appeared to be uncommonly lucky. She didn’t win the lottery once; she turned the trick twice. But all did not turn out well. Between pressure to help friends and family, all of the money was gone by 2001. Adams reportedly lives in a trailer.
8. Jay Sommers, 1988
Winnings: $5.8 million
($11.4 million today)
Sommers won a 20% share of a $28.9 million Michigan lottery jackpot, but later admitted he was too young (just 20) to handle his lucky break. In less than three months he had blown his first $290,000 check, mostly on five cars. Turning to a friend as financial advisor didn’t help and soon Easy Street was a distant memory as he took a job delivering pizza.
7. Sharon Tirabassi, 2004
Winnings: $10 million, Canadian dollars
($11.75 million, Canadian today; $11.4 million U.S.)
Tirabassi, of Hamilton, Ontario, had a great time with her jackpot. By the time she was finished buying cars, a big house, traveling to exotic locales, hosting lavish parties and helping out friends and family she was back where she started, riding the bus to her part-time job and living in a home she rents. She didn’t quite blow it all, though. She was savvy enough to put money in trust funds for her children. In various interviews she has expressed a positive attitude, saying she enjoyed the fun while it lasted, but then “it was time to go back to life.”
6. William “Bud” Post III, 1988
Winnings: $16.2 million
($31 million today)
Post had a rough life until he won the Pennsylvania State Lottery. As recounted in The Washington Post upon his death in 2006, mostly worked odd jobs after a childhood partly spent in an orphanage. When he won the lottery, he told reporters he had less than $3 in the bank and was on disability. His annual lottery payout was $497,953.47 paid out in 20 installments. Money spent on a plane (he wasn’t a pilot), luxuries for his siblings, and a mansion soon had him deep in debt.
Bankruptcy followed a string of problems including a brother who tried to kill Post and his sixth wife; a landlady who forced him to give her a third of his winnings; and an assault charge. In 1996, Post attempted to erase his debts by selling off the mansion and auctioning off his 17 remaining lottery payments. It was a failed gambit. The next year he was arrested on the 1992 assault conviction and served a prison sentence. After that, it was back to living on a meager disability check.
5. Janite Lee, 1993
Winnings: $18 million
($29 million today)
Lee made her winnings last longer than some. She opted for 20 annual payments of $620,000 each. She had eight years of living the wealthy life in St. Louis. Big donations ($2 million to Washington University alone), luxury items ($1.2 million for a house in a gated community) and political causes ($100,000 to a Bill Clinton luncheon in 1997) drained her money. In 2001, the former gift shop owner filed for bankruptcy.
4. Jeffrey Dampier, 1996
Winnings: $20 million
($29.8 million today)
Once again lottery winning was followed by misery. This winner of the Illinois lottery was divorced not long after winning. A move to Tampa, Fla., seemed like just the tonic. Dampier opened a gourmet popcorn shop and remarried. Then things took a nasty turn. An affair with his sister-in-law (she was 16 when Dampier paid for her abortion) that lasted years ended in murder--Dampier’s murder, that is. The Tampa Tribune reported that the sister-in-law, Victoria Jackson, was sentenced to thee concurrent life terms in the 2005 murder, carjacking and kidnapping of Dampier. Jackson’s boyfriend, Nathaniel Jackson (no relation), received a similar sentence.
2 (tie). Abraham Shakespeare, 2006
Winnings: $31 million
($36 million today)
Like the tragedy his surname might suggest, Shakespeare’s troubles lay largely in the stars. Just three years after winning the Florida jackpot, he disappeared having given away most of the money to anyone who asked for a handout. In 2010, his body was found under a concrete slab. DeeDee Moore, a woman who agreed to manage the remaining $1.8 million of his winnings, was convicted in 2012 of first-degree murder in Shakespeare’s death.
2 (tie). Billy Bob Harrell Jr., 1997
Winnings: $31 million
($45 million today)
The former Pentecostal minister from Texas had hit hard times. He was working at Home Depot in 1997 when his luck changed. His winnings were just what he needed, or so he thought. Harrell was careful about big purchases, limiting himself to cars and a home. But then the loans to family and friends started flowing. It was too much to bear. Less than two years after hitting it big, Harrell committed suicide.
1. Andrew Jack Whittaker Jr., 2002
Winnings: $314 million
($408 million today)
Whittaker, of West Virginia, hit it big winning a $314 million Powerball payout. He chose a lump sum payment of $170.5 million, leaving him with $114 million after taxes. It wasn’t enough. Several Christian charities received 10% of the windfall. Another $14 million went to start a namesake foundation. Whittaker gave the clerk who sold him the winning ticket a home worth nearly $125,000, a truck and $50,000 cash.
What followed was a twisted tale of gambling, strippers, the murder of his daughter and the theft of $500,000 in cash Whittaker carried around in a suitcase (money taken in a separate theft, $200,000, was recovered). In the end Whittaker was sued over bounced checks worth $1.5 million at Caesars Atlantic City casino. He later claimed all his money was stolen through forged checks.
-- Check out these related stories on ThinkAdvisor: