Photo Courtesy of Windfall Advisors
The original version of this article was created by Georgette Virgo and was published 06/09/25.
Click here to view the original article published by LA Weekly.
Six numbers drawn from a machine can transform an ordinary day into a life-changing moment that separates financial struggle from extraordinary wealth. Yet for many lottery winners, this dramatic shift brings unforeseen challenges that can either secure their future or lead to devastating loss.
This guide examines the essential steps lottery winners must take to preserve and grow their newfound wealth, drawing insights from Daniel Scott Johnson, CEPA®, a sudden wealth specialist and founder of Windfall Advisors. This specialized firm helps sudden wealth recipients, such as those from inheritance, settlements, sales, and the lottery, navigate the complex situation of unexpected fortune.
The First Rule: Stay Calm and Think Long Term
The moment someone announces the winning numbers, emotions run high. Excitement, disbelief, and anxiety often collide, creating a haze that clouds judgment. Johnson warns that the first critical step for any lottery winner is to pause and avoid making impulsive decisions.
“No matter how much you win, the temptation to celebrate with big purchases or share the news widely is strong,” says Johnson. “But the best thing you can do is take a breath, secure your ticket, and give yourself time to think clearly.”
The statistics say that roughly one-third of lottery winners file for bankruptcy within just a few years, a rate higher than the general population. The causes? Overspending, risky investments, and falling victim to scams are common pitfalls.
For Johnson, this is when the pause to everything is significant. This pause allows winners to process their new circumstances before making irreversible choices that could jeopardize their financial future.
Taking time to evaluate options allows winners to create a comprehensive plan. Johnson recommends resisting the urge to satisfy “long-suppressed material urges” or making grand gestures that seem reasonable at the moment but prove financially devastating over time.
Maintaining Privacy and Protection
With significant amounts involved, lottery winners often find themselves thrust into the public eye, making them targets for scams, theft, and unwanted attention. Staying anonymous is not just a matter of preference—it is a critical safety measure.
Johnson warns, “The moment your name becomes public, you will be approached by everyone from distant relatives to strangers with investment pitches. Protecting your identity is essential.”
According to Johnson, some states allow winners to remain anonymous, while others require disclosure. Even in states where anonymity is not an option, legal structures such as trusts can help shield a winner’s identity. He advises winners to sign the back of their ticket immediately, store it securely, and consult legal counsel before claiming the prize.
“If your state allows it, set up a blind trust or similar entity to claim the winnings,” Johnson recommends. “This protects your privacy and provides a layer of legal and financial protection.”
The importance of privacy extends beyond the initial claim. Winners should avoid sharing news of their windfall widely, even with close friends and family, until a plan is in place. Johnson notes that the sudden influx of requests for money and investment opportunities can be overwhelming and emotionally taxing.
Think Long-Term
For many winners, one thing is on their mind: “I just won the lottery. What do I do?” For Johnson, this is where long-term financial planning comes into play. Long-term thinking represents perhaps the most crucial mindset shift in wealth management for lottery winners.
The temptation to make immediate purchases—luxury homes, expensive cars, lavish vacations—can quickly erode even substantial winnings if not carefully managed. Successful wealth management requires viewing the lottery prize not as spending money but as capital that can generate ongoing income for decades.
Johnson recommends that lottery winners establish clear budgets that separate funds for immediate enjoyment from long-term investment capital. This method allows winners to enjoy their good fortune while making sure that most of their wealth remains protected and continues growing.
The goal should be creating sustainable income streams that can support their desired lifestyle indefinitely, rather than simply spending down the principal amount.
“The key is to think long term,” Johnson notes. “A sudden windfall can create a false sense of security. Without a plan, it’s easy to overspend or make risky investments that can be a problem over time.”.
Call a Friend: A Trusted Financial Advisor
For someone who has not experienced handling a significant amount of money, the stress of actually handling it, what’s next, and what to do with it can create a series of problems that can make things look overwhelming. When this happens, Johnson emphasizes the importance of a financial advisor for a lottery winner.
Specialized wealth management services, like Windfall Advisors, designed specifically for sudden wealth recipients, offer advantages that traditional wealth management cannot provide. Founded in 2020, it was created specifically to address the unique needs of lottery winners, inheritance recipients, and others who experience dramatic financial changes.
As a nationally recognized fee-only and Registered Investment Advisory (RIA) firm, Windfall Advisors manages all aspects of a winner’s financial life with no hidden fees or conflicts of interest.
With three offices in Los Angeles, Newport Beach, and New York, it has helped number of clients sudden wealth recipients and family offices turn windfalls into lasting legacies by providing diversified investment strategies, tax planning, estate planning, insurance reviews, and coordination with other professionals, such as attorneys and tax specialists.
“It is more than just budgeting and investment. Other unfamiliar and complex factors lie behind. Our job is to help our clients uncover this and avoid the mistakes that have derailed so many before them,” Johnson shares.
The Cost of Poor Guidance
Johnson argues that without professional guidance, the negative impact of sudden wealth is clear: bankruptcy, strained relationships, and a legacy of regret. With a thoughtful plan and the right advisors, lottery winners can turn a life-changing event into a foundation for lasting security and fulfillment.
“Winning the lottery is only the start of the story,” Johnson mentions. “What you do next will determine whether your windfall becomes a legacy or a lost opportunity.”
Professional assistance from firms like Windfall Advisors can mean the difference between a lottery win becoming a lasting blessing or a cautionary tale of missed opportunities and poor decisions.
Sudden wealth recipients, like lottery winners, need someone who understands the emotional rollercoaster of this new life and their new wealth. With hands-on and empathetic advice, Windfall Advisors helps them enjoy this newfound wealth with clarity, security, and, more importantly, enjoyment.
Please visit Windfall Advisors’ website to learn more about its sudden wealth management plans for lottery winners and why it is considered one of the best wealth management firms for lottery winners.