Won the Lottery? Here’s How to Protect and Grow Your Newfound Wealth

Winning the lottery can be life-changing, but it also presents unique challenges. The sudden wealth often comes with overwhelming decisions about how to manage, protect, and grow that money. Without careful planning, lottery winners can find themselves vulnerable to bad investments, excessive taxes, and even financial mismanagement.

The excitement of winning the lottery can cloud judgment, leading to impulsive decisions that could ultimately deplete the winnings. To ensure that the money lasts and supports long-term financial goals, it’s important to take careful, measured steps from the very beginning.

Keep Quiet About the Win

While it may seem exciting to share your good news, keeping it private allows you to avoid immediate pressure from others and focus on making thoughtful, informed decisions that align with your long-term financial goals.

“First things first: Don’t say a word,” says Nadia Vanderhall, financial planner and founder of The Brands and Bands Strategy Group. “Don’t post it, don’t text it, don’t bring it up at brunch. Let your win sit in silence while you think clearly.”

Some states allow winners to remain anonymous, while others reveal the identity of winners. For example, in Wisconsin, the name and city of the winner must be announced. However, in Delaware, winners can remain fully anonymous; in Florida, they can remain anonymous for up to 90 days after the prize is claimed (applies to winnings of $250,000 or more).

If you live in a state that does not allow full anonymity, you are under no obligation to discuss your win with friends, family, co-workers, or anyone else in your life.

Understand Your Financial Life and Habits

Many lottery winners lose their fortunes quickly due to poor financial decisions, pressure from others, and lifestyle inflation. While the lottery win may feel like a fresh start, if you’ve made poor financial decisions in the past, it’s best to confront them before making new ones. Take time to understand your full financial picture: how much debt you carry, where your money goes each month, and what spending habits may have contributed to financial instability.

“People run through winnings because they don’t pause long enough to check their habits [pre-lottery win]. Overspending, ‘helping’ everyone who asks, buying stuff just because they can—it’s a recipe for being broke again, just in a bigger house,” says Vanderhall. “If you didn’t have a system for managing money before, sudden wealth isn’t going to magically give you one.”

Ignoring these poor habits and patterns only increases the chances of repeating them on a bigger scale. Treat your windfall not as an escape from your past, but as an opportunity to build a healthier, financial future grounded in awareness and accountability.

Assemble Your Financial Team

Managing sudden wealth is complex, and navigating it solo can lead to costly mistakes. To make informed, strategic decisions, surround yourself with qualified professionals who prioritize your best interests.

“Build your team. And no, that’s not your family friend who’s good with numbers. You need a fee-only financial planner, a solid CPA/tax planner, and probably an estate attorney. These folks will help you protect your money and build a game plan that lasts longer than the check does,” said Vanderhall.

Free advice from friends, family, social media, or your favorite finance podcast may seem sufficient, but the value of a financial professional who understands your unique situation and can offer personalized, expert guidance can’t be replaced.

Safeguard Your Wealth

Once you’ve taken the necessary time to reflect and assemble your financial team, it’s time to protect your newfound wealth during the decision-making process. This means ensuring your money is kept in a safe, easily accessible account while you plan for long-term growth.

“After you meet with your A-team, find a temporary home for that money,” Vanderhall says. “That means a separate high-yield savings or money market account. You’re not trying to move it all around just yet. You’re giving yourself breathing room and creating space to make informed decisions, not rushed ones.”

Similar to a traditional savings account, both high-yield savings and money market accounts give you a place to safely park your cash, but they offer higher interest than traditional savings accounts, which means your money grows faster over time.

Leverage Tax-Saving Strategies

Without a solid tax plan, a big win can shrink fast. From the start, lottery winners should understand their full tax liability and how to minimize it.

One of the first major choices is how to receive your winnings:

• Lump Sum: This offers immediate access to funds and investment opportunities, but comes with a large upfront tax.
• Annuity: Spread over several years, this option’s initial tax impact provides long-term income stability.

A trusted tax professional can help you minimize liabilities and aid you in structuring your finances with the future in mind, to not only protect your winnings but also ensure your money aligns with your long-term values and goals. They may recommend specific strategies and tools for your situation, from charitable giving to tax-efficient investment vehicles.

“Use tools that lower your tax burden, too—retirement accounts, HSAs, or even setting up a trust, depending on your situation,” Vanderhall says.

Invest With Purpose

Sudden wealth can tempt winners to chase high-risk investments, but slow and steady growth is often the smarter path. Identifying your financial goals can help determine how much to invest in and which vehicle best supports those objectives.

“Start with what you want the money to do for you. Travel, retire early, build something for your family, or give back?” said Vanderhall. “Goals first, investment tools second. That means setting up a diversified investment portfolio—not chasing risky trends,”

Risky investments can drain your winnings quickly, sometimes wiping out millions in a matter of months. Stories of lottery winners losing everything often start with a sure thing that turned out to be anything but.

“Index funds and ETFs may not be flashy, but they help you grow consistently over time. It might be boring, but it still builds wealth. Also, if you’re into real estate investing, you could buy actual property or leverage REITs,” said Vanderhall. “Just because you have more money doesn’t mean you have to take on more risk.”

The Bottom Line

Winning the lottery is a rare event. The odds are incredibly low, which makes it all the more important to be smart about what you do next. Maintaining that sudden wealth takes more than luck; it requires careful planning, disciplined choices, and a long-term strategy. One impulsive decision can unravel that potential financial stability, so it’s important to move thoughtfully and surround yourself with trusted advisors from the start.