The Powerball’s $1.7 billion jackpot can usher in an era of extravagant wealth for a fortunate winner. However, financial planners emphasize the importance of what happens post-winning. They bring attention to a common set of mistakes that can transform a once-in-a-lifetime windfall into a long, public mess.

Avoid Rushing Big Decisions

Experts caution against haste as one of the damaging errors. Quickly claiming the prize, quitting job, or making big purchases can lead to regret. Taking time to process the shock and making no irreversible decisions until a plan is in place is the advice given by many financial outlets.

Making the choice between lump sum and annuity without thorough analysis is another common misstep. This decision affects tax timing, investment options, and the longevity of the money. Many winners fail to fully understand the implications of choosing the lump sum, leading to a significant decrease in the headline $1.7 billion after taxes.

Maintain Privacy after Powerball Win

Publicizing your win on social media or talking openly about it can invite unwanted attention. Financial advisors advise keeping it quiet, and if possible, claiming the prize through a trust or remaining anonymous to avoid becoming a target. They also highlight the emotional toll of sudden fame which can strain personal relationships and safety.

The Importance of a Professional Team

Attempting to manage a nine- or ten-figure fortune alone is a costly mistake. Financial planners highly recommend winners to assemble a vetted team of attorney, tax professional, and fiduciary advisor with experience in sudden wealth management. They caution against relying on friends or relatives with limited financial knowledge.

Avoid Overspending and Understand the Money is Finite

Many lottery winners behave as if their wealth is infinite, leading to unchecked lifestyle inflation and regret. It’s also common for winners to ignore the crucial steps of setting a sustainable withdrawal rate and diversifying investments, which are important to maintain their wealth.

Set Boundaries with Family, Friends, and Causes

Financial advisors warn against giving without a plan. They suggest defining a clear gifting and philanthropic framework to avoid resentment and relationship damage. They also caution that feeling obligated to become a benefactor can derail long-term goals and quickly consume capital.

The Importance of Long-term Planning and Purpose

Many winners focus on immediate indulgences and neglect estate planning, debt strategies, and long-term investing. Establishing basics like wills, trusts, and tax-efficient structures can make the windfall benefit multiple generations. Advisors also suggest finding a clear sense of purpose to avoid feeling directionless when the novelty of the win fades.

This story is based on the research conducted by Fortune journalists using generative AI. The accuracy of the information has been verified by an editor before publishing.

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