The first week of February may not be a record for the lottery drawings, after December and January crossed the $1 billion mark, but as of Monday there was a combined $175 million up for grabs in two different lotteries with drawings this week. The Powerball has reached $112 million for a drawing on Wednesday, February 3. Mega Millions has a drawing valued at $63 million for a drawing on Tuesday, February 2.

The $112 million annuity for the Powerball jackpot has a $72.3 million cash prize value. Mega Millions’ annuity value of $63 million has a cash value option of about $40 million.

Regardless of whether you take the cash or the annuity value, and regardless of which lottery you win, winning either will be a life-changing event for the winner(s). Unfortunately, with great reward comes great responsibility.

24/7 Wall St. has created a quick hit view of 12 Things Not to Do If You Win the Lottery. Sadly, many winners have not considered this, given that many of them go broke. Yes, broke. They couldn’t handle the influx of cash and they let temptation and outside pressure get the best of them.

What should be considered here is that lottery winners need to immediately protect themselves. That is protection from all aspects: scam artists and con-men, friends and family, and even from themselves! Imagine if you suddenly come into tens of millions of dollars and ended up broke. That will make you the brunt of every family joke for years and years.

Some lottery winners end up with too many cars, mansions, boats and endless other belongings. Other lottery winners buy everything they can think of for friends and family. Other lottery winners get targeted for fuzzy business plans or by scam artists. Even more sadly, there have been at least two lottery winners who were evidently murdered.

It might not seem possible to blow through millions and millions of dollars in a lifetime, let alone in a few years. It’s simple. Invest in a few failed businesses. Get an entourage to follow you on vacation. Buy a few houses and a jet and a bunch of hot high-dollar cars. It was hard to do in the 1980s movie “Brewster’s Millions.” but it can be done in short order now.

24/7 Wall St. does not want anyone who comes into instant wealth to go broke. This applies to people who win big financial judgments, who sell a business or other asset, or even those who suddenly and unexpectedly inherit millions. There may be many articles pointing out what winners should do, but our view here on the classic things to avoid — what not to do!

These are the 12 things not to do if you are ever lucky enough to win the lottery.
Don’t forget to sign a ticket or to report it to the state.

It is sad, but there is a lot of research showing that not signing a ticket or failing to report to the state are the simplest and most common errors to make. Can you imagine losing a lottery ticket? Then imagine what can happen if someone else snags your ticket and shows up to collect the prize. Fighting over true ownership of a lottery ticket is not a simple task, and many disputes have arisen over who owns what ticket. In a way, lottery tickets may be the last form of bearer bonds that anyone can collect on if they show up with the coupons and bonds in hand. Lottery tickets expire at different times from state to state, but they generally expire in 90 days to one year.

Don’t tell everyone you know.

If you suddenly win millions of dollars, chances would seem to be pretty high that you will to want to brag about it. How could you not? The problem is that announcing to the public that you won before you collect your winnings can put you in grave danger. Literally, grave danger. Everyone who has ever done anything for you now may come with their hands out asking for something, or worse. You probably have heard of kidnap and ransom insurance before. One lottery winner was even murdered. If you can manage it, and if your state allows it, try to remain anonymous for as long as humanly possible. How you became vastly wealthy will be found out in time anyway, but there is no need to alert everyone.

Don’t automatically decide to take the up-front cash.

Some lottery winners want all the cash up front. This automatically comes with a big discount to the annuity value, and it creates a serious tax event. Still, some lottery winners do actually choose to receive the annual annuity payments. Getting tens of millions of dollars at once probably sounds better than getting a paycheck for the next 30 years or so. Now consider that close to 70% of lottery winners end up broke, many within a couple or few years. Let’s say that you can choose to get $172 million up front, or you can choose to receive a payout of $300 million slowly over the course of a lifetime. Most people choose the lump sum rather than the annuity payment, as it is instant empire-making money. Go see a reputable and visible tax professional and a reputable investment advisor at a top money management firm with a widely recognized company name and a long corporate history. This theme of “reputable and visible” will echo throughout. Do this before you make the decision about a lump-sum or annuity option.

On money and finance, don’t think you are suddenly the smartest person.

Lots of people come into many. Many of them lose it all. Just because you become wealthy overnight, chances are extremely high that you are not all of a sudden the best person to manage your money and financial interests. If you go from living paycheck to paycheck, how likely does it seem that you will know the best things to invest in and the best tax and asset protection strategies? There are many ways to invest and protect that fortune, and that might not include just buying some stocks and bonds and letting it ride in the markets. Your drinking buddy might also not be the best choice as an advisor and expert. Having a solid and respectable team of advisors and managers in place will act as your buffer that protects your assets now and in the future. Also, don’t think that this money is a tax-free payment, as you probably will have to pay the top tax bracket to the IRS and the highest state and local income taxes. Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated? Here is a hint: If you answered yes, you probably did not bother playing the lottery.

Don’t become a deadbeat or let your debts remain in place.

If you get the “I’m rich and don’t have to pay anymore” bug, you might be dooming yourself. One lottery winner in California was strapped with debt from property purchases and what seemed to be excessive insurance policies, and he lost a vast portion of his new assets. Whether you take the lump-sum or the annuity option, if you have a single penny of debt in the immediate future or in the distant future, then something is seriously wrong with you. Lottery winners and those who come into vast amounts of money overnight should not have a single debt ever again. If you manage to go broke down the road and still have a mortgage, car payments, student loans, credit card debt and personal bills, you will have lost the right to be mad when all of your friends and family members ridicule you every day for the rest of your life.

Don’t be a high-roller or try to live too large.

If you go from living a simple life to instantly being able to spend hundreds of thousands of dollars (or more) per week, what do you think happens to your expectations in life ahead? Chances are high that you will want to keep that rush going. If you start gambling in Las Vegas or Macau and do not feel that rush until you are gambling with thousands and thousands of dollars (or more) per play, you are dooming yourself. Wait until the real con men find you. Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast. Having an entourage generally only works for people who keep making more money, and entourages have bankrupted many musicians and athletes.
Don’t go out and buy everything for everyone and for yourself.

There has to be a huge temptation for lottery winners to go out and buy all the millionaire toys they can think of. The answer here is simple to say and hard to follow, but you likely will regret the decision if you go out and buy dozens of cars, houses and whatever else you can think of for you and your friends and family members. This will start you on a bad path, and you could easily become the next friends and family personal welfare department. If you start buying everything for everyone, chances are high that they might expect that to last forever. The other end of the story is that you do not have to be a cheapskate either. Now consider a personal lottery story that was told in which a lucky winner bought more than 30 cars and multiple houses in three months for himself and friends and family.

Don’t say to hell with a budget — you better be smart here!

Do millionaires have budgets? The smart ones do. Maybe it sounds crazy that you have to live within means when you get instant empire-making money. After all, most lottery winners instantly become wealthier than everyone they know combined. This also goes back to having advisors and being prudent, but at the end of the day you do still have a finite sum of money. Chances are very high that you will make some serious purchases and your lifestyle will be changed forever. Without setting limits for yourself and for what you do with others is a recipe for disaster. Again, many lottery winners go broke. If they went broke in a very short period, what do you think the reflection about wishing for a proper budget would be?

Don’t become the business backer for all your friends and family.

Leave being a venture capitalist up to the venture capitalists. One common theme that has come up with lottery winners with instant vast sums of cash is that friends and family start pitching them on endless business ideas. Sure, some will sound great and some will sound crazy. If someone has no knowledge of a particular business and does not know what it takes to actually run a business, will that person do better because a lottery winner who lucked into vast wealth provided money to start it? If your answer is yes, you seriously need to protect yourself (from yourself). Now think about whether most lottery winners had the understanding of how to run a business the day before they won the lottery.

Don’t just give the whole thing away, even for charity.

Some lottery winners might feel so lucky that they want to give away just about all their money to a charity or to a religious institution. This sounds great, but even the truly wealthy who earn their money the hard way do not do this. You can be more than generous without doing the unthinkable. Imagine what you will feel like down the road if or when a serious crisis arises in your life or your family’s lives and you no longer have the finances to help. Should you be charitable? Absolutely! Should you give it all away just because a church or a charitable group does good things? Absolutely not. If you insist on giving away your new-found fortune, do it the way the wealthy do it — structure your will and estate to give away your fortune upon your death.

Don’t get celebrity and athlete envy.

Being a high-roller is one thing, but you can go incredibly broke real quick by trying to keep up with the spending habits and lifestyles of the most famous celebrities. Keeping up with the Jonses is bad enough, but you really better not try to keep up with the Kardashians or other celebrities. It is probably very cool to own a 200-foot yacht or your own private jet or to have your own entourage. It may also seem cool to own castles in Europe or to buy Picasso paintings in auctions. These can easily drain your financial statement to zero. Trying to dodge taxes in complex strategies might even sound appealing to misguided people, but that can land you with massive penalties and interest when it’s all over. Dodging your taxes may come with a greater price than just paying penalties. Now go add up the price tags of these things, plus the cool cars and houses and the rest of it. You can go broke real quick. Just ask people like Nicolas Cage, Wesley Snipes, M.C. Hammer, Evander Holyfield and many other famous people who had it all and ended up broke or close to it how they feel about the way they handled things.

Don’t think that the laws and decency standards no longer apply.

It is true that the wealthier you get, the better attorneys and legal defense you can afford. Still, you will have to live under the “good citizen” laws, and you still likely will have to pay taxes just like Warren Buffett’s secretary. Living a reckless life without concerns about the laws of the land will not keep you from going to prison (or worse). Most good sports coaches will tell their star athletes upfront that chances are high they will have to be human for far longer than they are going to stars. Movies can glamorize scoundrels, but what good does it do you if you are incredibly wealthy and such a pariah that no one will associate with you? Remember, you don’t get to take any of your wealth with you when you die. And how fun will it be to be paying out all of your winnings to attorneys fighting to keep you out of jail or fighting civil suits looking to take your new wealth away?

Is there a 13th runner-up issue?

Can you imagine that you need to think about the solvency or financial position of the state you are playing a lottery in? The State of Illinois did not have a budget resolution for much of 2015. The state’s finances have been challenged for years, and the state sadly did not have the money legally in place to pay out the winnings to its top lottery winners. Imagine getting the winning numbers, only to receive a state voucher. Can you change your life in a meaningful manner on a state voucher that is nothing more than an IOU?

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Again, 24/7 Wall St. would not want anyone who wins the lottery to end up without a penny to their name. The jokes you would have to hear about yourself might not be flattering at all. And that would also be deserved. Following a list of things to do or not do sounds easy enough. Unfortunately, life’s temptations can get in the way of logic for many people who suddenly come into money.

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