SUDDEN WEALTH COMES WITH BURDENS, OBLIGATIONS

Careful Planning May Keep You From Letting a Windfall Blow Away to Nothing

Tonya White had it from a reliable source -- her lawyer -- that she
would get a hefty check when her lawsuit settled.

Despite not knowing exactly how much it would be, she figured her
share would be enough to buy a car, pay college tuition and finance a
move out of the Texas Panhandle and into Shreveport, La.

White is one of nearly four dozen people in Tulia accused of
trafficking drugs by an undercover agent who has since been charged
with perjury for how he handled the case. She led the mostly
African-American group in filing a racial-discrimination lawsuit
against the city of Amarillo and 26 counties that had supervision of
the agent and his regional drug task force.

But when White got her share of the $6 million settlement, which was
split between 45 people and three law firms, it was only enough keep
her in the $40,000 truck she bought weeks before the money arrived.

"Everything I wanted to do, I can't do now," she said hours after
depositing the biggest check she had ever received in her life.

That's the problem with windfalls -- they rarely are enough to make
all your dreams come true.

But with careful planning, discipline and patience, you can make a
jackpot last a lifetime, or at least longer than the life of the
average car.

"There is a burden and an obligation associated with receiving
significant and sudden wealth," said Robert Weylandt, who worked as an
estate planning attorney before joining the wealth management division
of J.P. Morgan Chase Private Bank. "Getting the money does not end all
your responsibilities."

Should you be so lucky, here are some tips on how to handle
windfalls.

Answer when windfalls knock.

Las Vegas exists to tempt humans to give up what they have to get more
than they ever imagined.

Gamblers throw away hundreds of dollars in pursuit of the big jackpot.
Along the way, they bypass smaller prizes that, when put with other
winnings, may amount to a windfall.

The most common ways of acquiring sudden wealth are receiving an
inheritance, settling a lawsuit, selling a closely-held business and
winning the lottery.

But if that kind of lightening does not strike your life, don't ignore
the good fortune that comes your way in a small package.

That may mean selling your house for a few thousand less than your
ideal target price or taking a job with fewer stock options than you
wanted.

Write down financial goals.

Put on paper your priorities and desires, such as funding college
educations for children, buying a bigger house or taking a dream vacation.

Then rank those goals in order of importance. Post a list of your top
five goals around your home to remind you of what you want to do with
the money and to deter you from spending it foolishly on things not on
the list.

List all debts and bills.

Do not skip this step, no matter how uncomfortable it may make you.
You must know how much you owe to figure out how much it will take to
live comfortably. Tally your total debt load, includin

Now is not the time to go window shopping every cent you owe on credit
cards.

Add up your monthly expenses.

Track your daily spending by stuffing all your receipts in an
envelope. At the end of each week, count up what you spent and be
honest about which purchases were mandatory and which were optional.

All that information is the foundation of your budget, your guide to
avoiding buying more toys than you need and winding up with bigger
debts than you had before the windfall.

Sudden riches do not give you the ability to live without a budget.
They require you to make and stick to a spending plan.

Stay Out of Stores

Now that you know what you want to do, don't start window shopping for
your new life.

"I don't want to deprive people of their happiness, but I do want to
discourage impulse buying," says Melissa Bradley, a venture
capitalist, former money manager and Soros Justice Fellow at the Open
Society Institute.

White didn't intend to spend all her money before she got
it.

She merely went to a dealership to test-drive vehicles she might buy
after the settlement came. But someone on the car lot recognized her
as one of the Tulia 46.

And that dealership just happened to have a habit of selling cars to
people waiting on insurance checks, lawsuit settlements, tax refunds
and other big lump sums.

So, White wound up taking a $40,000 GMC Envoy home.

Find Some Advisers

Ask friends and family to recommend estate planning and tax attorneys
and certified financial planners. This is not the time to talk with a
broker.

"There are companies out there that will track down the annuity
winners and give them a lump sum in exchange for the annuity," says
Bobby Heith, a Texas Lottery Commission spokesman.

This is not the time to talk with those outfits either.

If your inner circle can't suggest anyone, ask your doctor and banker
for recommendations. Read magazine and newspaper articles to identify
experts in your area.

Don't hire anyone on the spot.

"You are entering a business relationship that can be treated like
entering a marriage," Bradley said. "Ask yourself, 'Is this someone
who talks down to me; does this person treat me like a human being.'
"

At the initial meeting, don't ask about products and services. Tell
the adviser you are not making any decisions yet and that you just
want to ask a few getting-to-know-you questions, such as:

What kind of client do you like to work with?

What kind of client do you typically work with?

Where did you go to school?

What licenses do you have?

Ask if you can have a list of references that includes two current
clients, two clients who match your profile and one of the adviser's
newest clients?

Call All References

Do not skip this step. Ask each person what they like and don't like
about working with the adviser.

After you select someone, take your list of financial goals and
spending plan to the second meeting.

Set Up a Legal Entity

Multimillion-dollar lottery winnings, legal settlements and cash
payments make this step necessary. Your legal adviser will do this for
you to minimize the amount of taxes you will pay.

But to be most effective, this work should be done before you get the
money, not after.

Remember, this is your money, and it is your responsibility to manage
it.

No matter how much you love your brother-in-law or respect your
advisers, you must stay involved in the process of budgeting,
investing and spending your money. Think of all the athletes and
entertainers you've read about in gossip magazines who failed to do
that.

Minimize Appearances

Word about your big win will get out just fine without you
participating in a Lottery Commission news conference. Being in the
public eye makes you more vulnerable to schemes and
solicitations.

In fact, if you have pesky relatives determined to make spending your
money their top priority, change to an unlisted phone number.

Create a Nest Egg

Put some of the money aside into a low-risk investment.

"That's your fail-safe, sleep-well-at-night money," Weylandt said.
"That's money you will not spend unless all the rest of the money is
gone."

It's the money you put aside to build a new life if you blow the
chance the windfall brought you.

It's a safety net to prevent you from falling all the way to rock
bottom.

Make Good on Obligations

No matter what you do to stay out of the spotlight, long-lost
acquaintances will find you and ask for money.

If someone recalls a promise to share a jackpot that you don't
remember, you can respond like this:

"I have every intention of maintaining my commitments, but I need to
take some time to explore all of my options. Please tell me in writing
what your expectations are."

Then, give a copy of the written request to your attorney and
financial adviser for advice on how to handle the situation.

You may need to set up a charitable foundation to fulfill your
commitments.

Be Realistic

The money will not fix all of your problems, and it certainly will
bring you new ones.

But you will find solutions if you avoid buying things until you have
cash in hand and get professional and reputable help.