Your first impulse after looking at your ticket and realising that you have won the National Lottery jackpot is probably to shout out this amazing news not only to your family and friends, but to everyone you can.
However, you should wait before announcing your lottery win even though you want to share your excitement. Take a step back and weigh up the legal and financial considerations below.
SAFEGUARD YOUR WINNING TICKET
You should make absolutely sure that you did actually win the prize before you celebrate your lottery win. Check your ticket again carefully and make sure your numbers match those on the lottery’s official website.
You also need to confirm that your ticket has the correct draw date. If everything matches, you are a jackpot winner!
The first thing you should do when you’ve won the lottery, is to sign the back of your ticket. The ticket is not officially yours until you do.
If someone else found your ticket, they would be able to present it to lottery officials and legally claim the prize. There would be nothing you would be able to do about it unless you had signed the ticket.
After you have signed your ticket, make photocopies of its front and back. You will then need to secure the original winning ticket in a safe place such as a safety deposit box.
You will only need this original ticket when you go to claim your prize.
STAY ANONYMOUS OR GO PUBLIC
Ithuba Holdings, official operator of the National Lottery in South Africa, say all winning tickets have a life span of 365 days before they expire.
The winners of large prizes will be given the option to go public or stay anonymous. If you wish for your identity to remain private, a record of your name will be kept for payment purposes but all of your details will remain confidential.
If you choose to go public, you must sign a consent form and then Ithuba will arrange a number of media events, including a winner’s press conference and television appearances.
Lottery winners are, however, cautioned that it is best to keep quiet and not broadcast their exciting news to the world. The advice is not to share the news with friends or co-workers except for immediate family members.
You should also consider shutting down all your social media accounts. News of a lottery win travels fast. If word of your win gets out before you are ready, acquaintances and long-lost relatives may approach you to see how they can benefit from your newfound wealth.
COLLECTING THE PRIZE MONEY
If you win R50,000 or more, you must fill in an official Prize Claim Form which you can collect from any Post Office. You would need to visit one of Ithuba’s regional offices in order to collect your winnings in person once your entry is validated.
TAKE A COOLING-OFF PERIOD
You should do nothing at first and let the idea of the wealth settle in. Consider various options and take no decisions at this stage. What you will do with the cash will depend on the size of the win, what your current life stage is, and what your family and personal needs are.
SPEAK TO PROFESSIONALS
You need to involve the help of a financial who can advise you independently on using the money to reach your financial goals as effectively as possible. You may also want to speak to a lawyer to discuss leaving a legacy, and possibly a psychologist who might assist you to come to terms with your emotions around dealing with your new-found wealth.
PAY OFF EXISTING DEBT
You will have the opportunity to pay off as much debt and loans as you can. Paying off debt also means lower interest payments on that debt, which is like saving in reverse.
SET FINANCIAL OBJECTIVES
You will need to consider both your short-term and long-term financial objectives, taking into account your current life stage and family needs.
You may wish to provide for your children’s education or ensure that your parents have a comfortable home. Consider what purchases you would like to make, such as homes and vehicles.
You should also look at your retirement and the amount of income you would like to be generating even if you expect never to have to work another day in your life. Insurance policies must to be taken into account, including medical cover and an emergency fund too.
Make a list of everything before you spend a cent. Then sit with your financial advisor to decide the optimal way to achieve those objectives and strategise on getting there.
DON’T QUIT YOUR JOB YET
You should not quit your job while you are still planning what to do with the cash and getting used to the idea of being wealthy. Keep everything as normal as possible.
DON’T EXPAND YOUR LIFESTYLE
It might be very tempting to expand your lifestyle with a sudden cash injection, but it is hard to stop when you start on that path. It is best to stay as grounded as possible.