This Is How Lottery Winners Build Lasting Legacies, From a Financial Professional

Winning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.

By Peter J. Klein, CFA®, CAP®, CSRIC®, CRPS®

published 13 September 2025

in Features

A man and woman celebrate a win as they sit at an outdoor cafe looking at a laptop.

(Image credit: Getty Images)

One of the biggest Powerball jackpots in history — more than $1.4 billion — was just claimed. Whenever news of lottery wins this big breaks, people across the country start imagining what they would do if luck struck their numbers.

For most, the dream ends with visions of mansions, luxury cars or world travel. For the lucky few who win, their lives will be forever changed.

So, imagine it really does happen to you; you win the jackpot. First things first: relax. I know the adrenaline is still rushing, but the first thing to do is to pause and breathe.

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Then, before you do anything else, seek the right legal counsel. You need a financial adviser who specializes in working with lottery winners, a trusted professional who understands how to navigate the state's gaming department and set up trusts that can protect your identity wherever possible.

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Protecting your identity and your winnings

For years, my team and I have worked with lottery winners. I've seen the difference it makes to get the right team in place early. Making sound investment decisions can mean the difference between long-term stability or losing it all. Nearly 70% of lottery winners exhaust their winnings within a few years.

You can avoid the spotlight through carefully designed trusts and other legal instruments.

Taxes are another major consideration, with federal income tax brackets starting at 24% and climbing, depending on your income. Hence, it's critical to work with a trusted financial adviser who understands these specific issues.

Building a family office

I suggest that lotto winners establish what is essentially a family office — a structure that supports their financial lives from day one.

A financial adviser can guide decisions on how assets should be owned, whether in trusts, LLCs or other entities. Much of this work overlaps with estate planning, because sudden wealth makes questions about long-term protection unavoidable.

But for many of my clients, the conversation quickly turns to something even more lasting: philanthropy.

After the houses, the cars, the trips and the gifts to relatives, the truth settles in — you have more wealth than you'll ever reasonably spend. At that point, the real opportunity presents itself: how to give back in ways that reflect your values and build your legacy.

Author Shannon Alder put it well: "Carve your name on hearts, not tombstones. A legacy is etched into the minds of others and the stories they share about you."

Philanthropy as a mission, not a hobby

Philanthropy is not simply about writing checks. It's about aligning resources with your mission to do good. And while anyone can be a philanthropist, substantial resources allow you to scale that mission into something enduring.

The question for you as a lottery winner is how to transform your charitable intentions into a structured, lasting plan.

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Donor-advised funds (DAFs) and private foundations are among the most powerful vehicles to do this. DAFs have surged in popularity in recent years, with contributions reaching $85 billion in 2022.

These vehicles allow you to receive an immediate tax deduction, invest the assets for growth and distribute grants over time to the charities that align with your values.

But before you select a giving vehicle, you need clarity about your mission:

What do you want your wealth to stand for?
How do you want your children or grandchildren to understand the role of this gift in their lives?

I often guide clients through a thought experiment: Imagine you've already provided financial security for your heirs, and they have what they need to live comfortably.

At that point, the question becomes not how much more to give them, but how to pass down your values — helping to ensure your legacy reflects more than wealth alone.

That, ultimately, is what philanthropy allows you to do.

From wealth to legacy

Of course, it is not always straightforward. Once people know you have won big, you will be approached from every angle — acquaintances with new-business ideas, organizations seeking donations and even bad actors.

This is where having a trusted adviser becomes essential. A qualified financial adviser can help you filter opportunities, weigh risks and align your giving with your financial goals.

In my practice, I encourage clients to think of giving as a parallel track to wealth management — not a separate afterthought, but a central element of their financial identity.

Winning the lottery is an extraordinary stroke of fortune. But true wealth is not measured only by what you keep. It is measured by the lives you touch, the communities you strengthen and the values you carry forward.

That is the kind of legacy money cannot buy — but philanthropy can.

ALINE Wealth is a group of investment professionals registered with Hightower Securities, LLC, member FINRA and SIPC, and with Hightower Advisors, LLC, a registered investment advisor with the SEC. Securities are offered through Hightower Securities, LLC; advisory services are offered through Hightower Advisors, LLC.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Peter J. Klein, CFA®, CAP®, CSRIC®, CRPS®, is the Chief Investment Officer and Founder of ALINE Wealth, a wealth management firm that specializes in providing clients with financial planning advice for every stage of their lives. Along with Peter’s deep financial wisdom, he adds considerable acumen in philanthropy, helping clients navigate family trusts, institutions, and nonprofits.