The Wall Street Journal has an article today, providing guidance for folks that are blessed with a windfall. I agree with the article that this is a dream of most people. It's like the fantasy of what I would do with a huge lottery winning. I think as human beings we need our dreams, otherwise what are we striving for?
At any rate, I found myself chuckling at the article in the WSJ. I feel it is all common sense, but based on the reality experienced by most winners of the lottery - it isn't. My advice, lock the money away, even from yourself. Put it in a trust, that doesn't have a name including any identifiable characteristics of you. And be the trusty for this trust.
Set the trust up from day one to disburse no more than 50% of earnings per year, including expenses. The trust should be invested into relatively safe vehicles like a mutual fund, or any other diversified items. Just do not have all your cookies in one cookie jar.
The disbursements can be 100% to you or divided as you see fit between yourself, children, etc. Treat the trust like a business. Delegate the successor in case something should happen to you.
Then sit back and collect from the trust as you set up on day one. Again, you must live within your means, but this is a relatively secure stream of income. And if invested properly should continue to grow annually in disbursement size.
A properly structured trust should flow to future generations, by passing probate and taxes.
That said, stop listening to me or others and speak with professionals should you be on the receiving end of big cash! It will be worth it in the long run.
1 comments:
Agreed!! We all are probably dreaming of a windfall of sorts, and if that ever did happen, definitely seek professional help with managing it.
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