Callie Rogers, age 16, won $3.1 million in a British lottery. By the age of 22, the unwed mother of two, having attempted suicide twice, and having spent over $400,000 on drugs alone (in addition to more conventional luxuries), was broke, living with her mother and working three cleaning jobs.
William “Bud” Post won $16.2 million in the Pennsylvania Lottery in 1988. Within five years of his windfall, he cursed the day it happened. By the time he died in 2006, Mr. Post had gone from scooping up annual lottery payments of $497,953.47 to scraping by on $450 per month in disability compensation.
Jack Whitaker took only four years to blow through $113,386,407.77 (after taxes) in 2002 West Virginia Lottery winnings. In that time, the well-dressed, successful businessman morphed into a slovenly strip-club patron. His impact on the lives of his loved ones was even more tragic. As a result of his lavish gifts to his granddaughter, Brandi, he saw the apple of his eye go down the road to drug addiction with several hangers-on in tow. She ended up dead under circumstances that pointed to murder.
So what will your loved ones do with what you leave behind for them? The above examples are extreme, but they show how a sudden windfall can quickly turn from a blessing into a curse. The lesson applies to all of us, when you consider that a life can be ruined over far less than a million dollars. Fortunately, dumping boxes of cash on your beneficiaries after you are gone is not your only option. Rather than give your loved ones direct access to what you leave behind, you can give them their inheritance in trusts, administered by people or institutions who will provide good judgment and wise guidance. Those trusts can contain provisions to protect your beneficiaries from bad habits, opportunistic friends and family members, and their own lack of wisdom and experience.
Your legacy deserves to be passed on in a way that will genuinely benefit your loved ones. For some ideas about how to do that, consult your trusted advisors and people who have been on the giving and receiving end of large gifts. Our Website, www.est8planning.com, provides additional guidance.