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July 1, 2008

The happy but unknown lottery winner

Don McNay

Baby we can do it, take your time, do it right, we can do it baby, do it tonight

— The SOS Band



In my last book, I told lottery winners four things: Don’t let anyone know you won. Set up a trust. Hire good attorneys and advisors. Take the money in annual payments.

On June 27, someone near Cincinnati collected a $196 million Mega Millions jackpot. The winner did it exactly the way I outlined.

I feel like I won the lottery myself.

I’m not sure if the winner read my book, but they followed my game plan.

Unlike most lottery winners, the Cincinnati winner should have a happy life.

According to the Cincinnati Enquirer, the ticket was sold in May, just outside of Cincinnati. Several weeks later, an attorney from the Cincinnati law firm of Graydon, Head and Richey claimed the ticket on behalf of an undisclosed client.

A blind trust was set up and the winner opted for 26 annual payments of $7.5 million each.

Most people can live on $7.5 million a year.

Because the identity was kept private, the winner won’t have a posse of newfound “friends” looking for a handout. He or she won’t become a national laughingstock like Powerball winner Jack Whitaker.

I know several members of the Graydon law firm. I’ve never heard one tell a client to bring $600,000 to a strip club like Powerball Jack did.

It’s been said that more than 90 percent of people who get a large lump sum run through it in less than five years. The Cincinnati winner won’t be in that category. It will take 26 years before the final payment comes in.

I always tell lottery winners to take the money in annual payments, but only 2 percent do. The tax and financial advantages of payments are better than a lump sum.

The Cincinnati winner didn’t rush to grab the money. They took their time and made a plan.

I’ve seen several winners (all who have run through their money) go straight to a car dealership and buy an expensive car BEFORE going to the lottery office and cashing their ticket. They couldn’t wait to parade around and wave a large check.

They also couldn’t wait to blow all their money.

The Cincinnati winner bought the ticket in May but it was not cashed until late June. The winner went to great lengths to protect their identity. The trust and advisors were put in place before the ticket was cashed.

We don’t know the name of the winner. Ohio has an exception to the opens records law if lottery winnings are collected in a blind trust. The winner’s name is only known to a few lottery officials, so they can see if the winner owes back taxes or child support.

I’m a fanatical believer in open records laws but would make an exception on keeping the recipient of lottery blind trusts quiet.

Lottery winners weren’t expecting to be public figures. The pitfalls of sudden fame outweigh the advantages of unexpected money.

Many lottery winners have screwed up their lives, and the publicity was a large factor.

State lottery commissions should want blind trusts. Although lotteries get a media blast when a winner is dancing around with a big check, they also get the embarrassment of watching guys like Jack Whitaker make fools out of themselves.

Jack was robbed and sued. His wife left him and his granddaughter died of an overdose. That lifestyle can’t be an encouragement for people to play the lottery.

My worst nightmare would be living Powerball Jack’s life.

I wouldn’t mind living like the Cincinnati lottery winner. It would be nice to quietly get $7.5 million a year. With a trust, I could assure money for my family and charitable interests.

If I took a sudden hankering for casinos and strip clubs, the trustee would stop me from walking around with $600,000 in my pocket.

It would be a good life. Which is what winning the lottery is supposed to bring you.

Money can bring happiness to those who take their time, make a plan and do it right.



Don McNay is the Chairman of the Board for McNay Settlement Group in Richmond, Ky. You can write to him at don@donmcnay.com or read his award winning column at www.donmcnay.com

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