With $68 million up for grabs Wednesday night in the Lotto 6/49 Golden Ball draw, many Canadians will be waiting to check their numbers once the draw is made.
But once the golden ball drops — and according to lottery officials, someone is guaranteed to win all $68 million — what should the lucky winner or winners do?
Well, according to Stephan Desbiens of Exponent Investment Management, the very first thing you should do is stop, think and breathe given that you are receiving a large influx of cash.
“Just to try to really understand the moment that you’re in and possibly how things might actually impact the rest of your life,” he said in an interview with PKBNEWS on Wednesday.
Next, sign your ticket and keep it in a safe place, as you will need to do some additional things before cashing in the winning paper coupon.
Since you’re about to receive an influx of cash, Virtus Group’s Frank Hounjet advises that you contact your attorney, accountant, and financial planner so you can plan what you’ll do with the new financing, while you trying to avoid legal action. problems that could arise.
In doing so, you can also begin to plan for the resulting publicity and potential solicitations you may receive not only from friends, charities and scammers, but even family members.
“So basically I’m trying to figure out how you want to distribute those earnings, how you want to plan for your retirement needs, what you want to give and give way to your family, your friends.“, he said.
“What you might find is that afterward, you’ll find yourself with lots of new friends and maybe new family members coming out of thin air. So it’s very important to have that plan in place and execute it along those lines and really support afterwards..”
Once you feel like you’ve developed a proper plan for managing the money, it’s time to finally cash in on that prize, but you should be aware that expectations of privacy will likely disappear once you do. .
Most lottery companies, such as the Ontario Lottery and Gaming Corporation (OLG), are allowed to post winnings on their website and most also post a photo of the winner for a year after the winning is claimed. price.
That’s why Desbiens suggests it wouldn’t hurt to take a little time.
“The getting away part, whether it’s a trip or just staying out of the limelight, is because the limelight will probably last a few months,” a- he declared.
With this added publicity, you should also consider interviewing more advisors to help you because, as Hounjet said, while your current lawyer or accountant may be good at real estate transactions or preparing a tax return, they he or she may not be able to advise you on estate planning. or a family trust that could come into play with the winnings.
“As your life becomes more complicated, you may need the help of a more specialized professional to help you manage these areas,” he said.
Speaking of taxes, Canadians may have often heard that American lottery winners pay considerable amounts in taxes on their winnings.
The good news is that in Canada, winnings are not taxed because they are considered “windfalls” – unexpected payments that can also include gifts or inheritances.
According to TurboTax, an online platform that allows Canadians to file their own taxes, it says everything from a local hockey team’s 50/50 drawing to the 6/49 Lotto is not subject to tax. tax.
However, the Canada Revenue Agency (CRA) warns that even if the winnings are not taxed, any income generated by the money if invested in a non-registered investment or account — such as stocks or funds mutual funds that earn interest or dividends — would result in Canadians having to pay taxes.
TurboTax advises if earnings are to be invested, a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) should be considered if contribution room exists.
“As your financial life gets more complicated, so do the tax aspects. So a good accountant will help you navigate these waters,” Hounjet said.
Although winning the lottery can come with stress, Desbiens and Hounjet stress that Canadians should make sure to take care of their physical and mental health, as it is difficult to enjoy this wealth and time spent with loved ones when they are sick.
Desbiens adds an additional benefit to a lottery win – aside from an influx of cash – and that is that it can help you restore your “life balance”.
Whether it’s quitting a job you don’t like, getting out and traveling, or staying connected with people you love, it can be a jackpot for your own 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.”
He does, however, suggest that people who love their job think twice before quitting, because it’s possible it won’t be there anymore if you choose to come back.
So if you win a lottery jackpot, it’s best to talk with those you work with about needing a break rather than just quitting so you can continue doing the things you love.
The other difficulty Canadians may encounter when winning the lottery is how to potentially gift it to family and friends.
Hounjet says that’s why making a well-defined plan after winning can help.
“Essentially, you could have an annual budget for donations and maybe even an annual budget to help family and friends,” he said. “So you have this defined pool of dollars that has already been allocated, you have to stick to that pool.”
According to Desbiens, he has had clients who may have made promises at the beginning or even transferred money to the family who then had to be called back, thus creating tensions. He said that’s why he encourages not making big decisions in the first year and expressing it to those you love.
“The ones that you want to take care of, know that they’re going to be taken care of and you can help them a little bit in the short term and let them know that they’re doing great and that, you know, you plan to be generous and things will fall into place,” he said.
Ultimately, Hounjet said the most important thing about winning the lottery is staying grounded.
“Keeping that calm, cool and collected head will go a long way in all aspects in terms of mitigating problems, planning properly for the future and also staying grounded.”