Winning the lottery is a life changing event. It can be a change for the good, or a tragic change for the worse. For those who do not know how to handle such large sums of cash a lottery win leads to financial disaster and personal misfortune.
The pitfalls awaiting the unwary include kidnap, over commitment, law suits and a strange social phenomena called anomie. Anomie is an inability to come to terms with a change in social circumstances. Those afflicted can use their new found wealth to slip off the rails under the influence of drugs, alcohol and indulgence.
The first mistake comes through publicity. It is unwise to publicise a lottery win because this can encourage unwanted attention. At the most benign this can encourage friends, charities and chancers to write begging letters. At the most malicious it can encourage burglary, kidnap and fraudulent advice.
A very famous case concerns Bazil Thorne, an Australian, who won £100,000 in a state lottery in 1960. When his details were made public kidnappers held his son to ransom and later killed the boy.
In 2006, Abraham Shakespeare, winner of a $31 million in a Florida lottery. He was pestered by friends and relatives for money, accused of stealing the winning ticket from a lorry driver and duped out of $1.6 million by Dorice Donegan Moore who because his girlfriend and financial advisor.
A second mistake concerns spending the winnings, or making life changing decisions, before making doubly sure that the win is legitimate. Sometimes disputes arise regarding the ownership of a winning lottery ticket that has for instance been dropped in the street, or among members of a syndicate. In other cases the change in lifeste caused by a lottery win can cause relationships to break down leading to legal challenges for part shares in the winning. On some occasions the winning ticket holder may be unable to claim the prize.
In July 2009 Barry Shell won $4 million in an Ontario Lottery. Although he claimed the prize a routine check by the Lottery revealed that he was wanted on police bail. He was promptly arrested.
In November 2004 Juan Rodriguez was struggling his marriage was falling and he had filed for bankruptcy. The Columbian immigrant came good winning won $88 million in the Mega Millions lottery. During the divorce proceedings access to the prize was suspended for both Rodriguez and his wife. The bankruptcy petition was removed due to the change in circumstances and Rodriguez gave, by court award, half his winni8ngs to his wife.
The third mistake involves overspending, over-committing and squandering the winnings. Problems undoubtedly arise through miscommunication particularly among relatives. When Jeffrey Dampier won $20 million in the Illinois Lottery in 1996 he resettled with his parents and family in Florida. In July 2005 Dampier was shot and killed by the boyfriend of his daughter in law because he was not generous enough.
Even with careful budgeting lottery winners need to be particularly careful that they are not exposed to legal actions. In everyday life most citizens are not worth suing through the civil courts because they have little net wealth. High net worth individuals have much more lucrative cases to pursue through the courts. Lottery winners need to be careful that they are not exposed to, or at least are well defended again any claims that may be made against them. Unprecedented large court awards could severely dent their new found wealth.
Anomie might be described as the fourth and most powerful force on the path to financial disaster. For those affected the condition is difficult to control. Gambling, drink, drugs, nightclubs, extravagance and general squandering can eat into wealth and happiness, It is not uncommon for a lottery winner to exhaust the prize within several years. Once the fund is exhausted it is important to revert to a more modest lifestyle before debts ensue.
A prudent lottery winner, or beneficiary to any lump sum, could avoid most of these problems by developing a financial plan with which to manage their new found wealth and avoid the lure of easy money.