If recent history proves precedent, California lottery officials could have a long wait before learning who bought the winning $528-million Powerball ticket at a Chino Hills 7-Eleven last week.
After six days of silence, the possibility appeared to be mounting that the winner of the largest payout in California history is following the last big Powerball winner by taking the deliberate path to riches: careful selection of a team of advisors.
That could take time.
“Three to six months is not unrealistic,” said Michael Eisenberg, an Encino certified public account and personal financial specialist.
Eisenberg said a winner would be wise to interview multiple trust attorneys, accountants and investment counselors.
California’s last big Powerball winner took six weeks to turn in the ticket. When he did, on April Fools’ Day 2014, Bay Area resident B. Raymond Buxton made a choreographed appearance, said California Lottery spokesman Alex Traverso.
Buxton appeared with his lawyer, his accountant and his public relations consultant to claim the $425-million jackpot.
“He had taken some time as to how he wanted to do it, down to the shirt he wore,” Traverso said.
It featured the “Star Wars” character Yoda, and read: “Luck of the Jedi I have.”
When it came time for his photo, Buxton, knowing that his name would be made public, had a plan to protect the rest of his anonymity. He shielded his face with the oversized check for $242.2 million, the amount he received for taking the cash option.
Financial and tax consultants who advise those who have come into sudden wealth say the new winner is following the smart path to remain silent.
“Vetting the advisor you start with is probably the most vexing part,” Sheehan said. “That’s the Catch-22. Whoever it is they confide in, they have to be very comfortable with the fact that it’s not going to come out.”
Buxton’s lawyer, Susan von Herrmann, described her client as “a great example of how this can go well. They did exactly what you hope happens.”
First, Buxton read the California Lottery guidebook on how to handle the money. Following its recommendations, he went looking for a team of advisors.
That proved difficult, von Herrmann said, because he had to ask for interviews without saying exactly why he needed help.
The family’s desire to avoid public attention turned out to be the most time-consuming problem, von Herrmann said. They had to consult security specialists to protect their house and put together a travel plan to be sure they weren’t home when the media descended on their neighborhood.
Finally, for tax purposes the family had to determine how much it was giving to charity — a substantial amount, von Herrmann said — and make the contribution.
Susan Bradley, founder of the Sudden Money Institute of Palm Beach, Fla., said it takes at least two months to prepare the winner emotionally and psychologically for the dramatic change ahead.
Bradley, whose organization trains financial advisors on dealing with clients such as athletes, film stars, divorcees and lottery winners, said her experience is that most people who suddenly come into money express a desire not to change — to stay in the same house, the same job and the same lifestyle.
But that isn’t realistic.
All of a sudden you can buy an island for your family, you can buy this 28-room chateau in France.
“It takes a long time to get it right,” Bradley said. “It sounds so easy. The minute you sit down to do it, you see the complexities. They need to live into the experience.”
Within two years, most have sold their homes, she said.
Creating trusts and financial plans is important, but not the most important challenge, Bradley said.
“We try to normalize their life,” Bradley said. “People are adapting to this newness. It affects their health, their family, their sense of purpose and esteem. There is something universal about all of that. This stuff transcends age, gender, race, education, sophistication.”
Time should also be spent considering a new budget, said Eisenberg, the CPA. A realistic assessment of a new lifestyle should go into the decision of how much money to set aside for cash flow.
“All of a sudden you can buy an island for your family, you can buy this 28-room chateau in France,” he said. “What you also want to do is take your time before you make any major decisions.”