With $68 million up for grabs on Wednesday night in the Lotto 6/49 Gold Ball draw, there will be a lot of Canadians waiting to check their numbers when the draw is made.
But once that gold ball has dropped — and according to lottery officials it is guaranteed someone will win the $68 million — what should the lucky winner or winners do?
According to Stephan Desbiens of Exponent Investment Management, the very first thing to do is stop, think and breathe.
“Just to try to really understand the moment that you’re in and possibly how things could really impact the rest of your life,” he said in an interview with Global News on Wednesday.
Then, sign your ticket and store it somewhere safe because there will be some additional things you’re going to want to do before turning in the winning slip of paper.
Given you’re about to come into money, Frank Hounjet with Virtus Group said you should contact your lawyer, accountant and financial planner to plan out what you’ll do with the new funds, while also working to prevent legal issues that could arise.
You can also start to plan for the resulting publicity and potential solicitations you might get from friends, family, charities and scammers.
“So essentially trying to figure out how you want to deal those winnings, how you want to plan out your needs for retirement, what you want to donate and give away to family, friends,” he said.
“What you might find is a lot of new friends and maybe some family members that come out of the woodwork. So it’s very important to have that plan in place and basically execute on those lines.”
Other advice you could seek out is from former lottery winners who know the experience of taking home a lot of money.
Ontario Lottery and Gaming Corporation spokesperson Tony Bitonti told Global News the company has a group of former winners who voluntarily give advice to those who win jackpots.
“We reach out to them from time to time and say, ‘Hey, there’s a gentleman that just won $60 million … Can you give him or her some advice?'” he said. “They’re always so generous with their time.“
Once you feel you’ve made a suitable plan for managing the money, it’s time to finally claim that prize. But you should be aware that any expectation of privacy is likely going to disappear once you do.
Most lottery corporations, like the OLG, have the right to publish wins on their website with most also post a photo of the winner for one year after the prize is claimed.
It’s why Desbiens suggests it might not hurt to take some time away.
“The getting-away part, whether it’s a trip or just shutting yourself out of of the limelight, is because the limelight will probably last for a few months,” he said.
That extra publicity means you should also consider interviewing more advisors to help you because, as Hounjet said, while your current lawyer or accountant could be good at real estate transactions or preparing a tax return, they may not be able to advise on estate planning or a family trust that could come into play with the winnings.
“As your life gets complicated, you might need the help of a more specialized professional to help manage those areas,” he said.
Speaking of taxes, Canadians may have heard of U.S. lottery winners paying substantial amounts in tax on their winnings. The good news is that in Canada, winnings are not taxed as they are considered to be “windfalls” – unexpected payments that can also include gifts or inheritances. In part, this tax policy derives from the fact that lotteries in Canada are run by charities and governments who benefit from ticket purchases.
The Canada Revenue Agency (CRA) warns that while the winnings are not taxed, any income the winnings generate if invested in a non-registered investment or account — such as stocks or mutual funds that accrue interest or dividends – would be taxable.
“As your financial life gets more complicated, the tax aspects also get more complicated, so a good accountant will help you navigate those waters,” Hounjet said.
Winning a lottery can come with stress. Both Desbiens and Hounjet say Canadians should be sure to take care of their health both physically and mentally because it’s difficult to enjoy that wealth with loved ones if you fall ill.
Desbiens adds one additional benefit to a lottery win — aside from an influx of cash — is it can help restore your “life balance.”
Whether this is through quitting a job you don’t like or travelling, it can be a jackpot for your life.
“Staying connected is an important part of financial well-being and your health,” he said. “So don’t break that connection just because you feel like you should be doing more with your money to enjoy it.”
Desbiens suggests people who love their job think twice before quitting.
Should you share?
The other difficulty Canadians can face when winning the lottery is how to go about potentially gifting it to family and friends.
Hounjet says that’s why coming up with a well-defined plan after winning can help.
“Essentially you could have an annual budget for donations and perhaps even an annual budget for assisting family and friends,” he said. “So you’ve got that set dollar pool that’s already been allocated, you need to stick within that pool.”
Desbiens says he’s had clients who have made promises early on or even transferred money to family that then had to be called back, creating tension. He said it’s why he encourages not making any big decisions in the first year and expressing that to those you love.
“Those that you want to take care of know that they’re going to be taken care of and you can help them out a little bit in the short-term and let them know that they’re going to be just fine and that, you know, you plan to be generous and that things will will fall into place nicely,” he said.
In the end, Hounjet said the most important thing when winning the lottery is to stay grounded.
“Keeping that calm, cool and collected head will really go a long way in terms of mitigating any issues and planning properly for the future.”
—with files from Global News’ Kevin Nielsen