My mom is about to become a multimillionaire...

Dank Lotion · Apr 1, 2022

... and I'm terrified.

To make a sad story short, my grandma and special needs aunt died due to EXTREME neglect at a nursing home a couple of years ago. My mom has been fighting them tooth a nail with her lawyers and is about to win a case that will net her 8 figures.

We've never had that kind of money in the family and my mom has always been terrible with finances. I've consistently had to loan her cash throughout my adult life. Which I have no problem with because... she's my freakin mom. Not to mention everyone in the family has constantly used her as a doormat my whole life (to include my siblings). I've already told her I want none of it. I'm single, no kids, with a really good paying job so I want to be the last person she has to factor in for this money.

My question for you ERA is how can I help her? She obviously sees this as a "blessing", but I can't help but be afraid of how much chaos this is gonna cause for her. Are there any financial advisors she should get? What are the do's and don'ts of what to do with it?

I don't want my mom to end up like the people who have won lotteries (in debt, family torn apart; etc). With how batshit her side of the family is and her history with finances I can see this getting extremely messy for her. Plus, she's already started having health issues and is only about to turn 60 this year. Maybe I'm just overreacting but I just don't see this not being extremely stressful for her. 🙁

Volimar · Apr 1, 2022

A lawyer and accountant/money manager seems like the way to go, but at the end of the day it's only natural to go a little wild with that kind of money if you've never had it. Not much you can really do about family members. Greed can do nasty things to people.

oakenhild · Apr 1, 2022

Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

PlanetSmasher · Apr 1, 2022

Definitely a good idea to get a financial advisor/lawyer involved.

jwk94 · Apr 1, 2022

Do the rest of the fam know she's getting any money? If not, don't tell em a single thing.

FTF · Apr 1, 2022

Volimar said:
A lawyer and accountant/money manager seems like the way to go, but at the end of the day it's only natural to go a little wild with that kind of money if you've never had it. Not much you can really do about family members. Greed can do nasty things to people.

Yeah, a financial advisor/lawyer/money manager should be a must.

jph139 · Apr 1, 2022

Yeah, getting a good, objective lawyer, and probably putting the money in a trust is a good idea. If she wants to spread some out to friends/family, she needs to set ground rules fast before people - intentionally or not - start to see her as a cash spigot.

Surakian · Apr 1, 2022

You aren't overreacting. You need to get her a lawyer and financial advisor. Vet them very well. Also remind her that she needs to set more than half of it aside for taxes. She's in a completely new bracket now.

A trust would be a great option for her.

You have to convince your mom to not tell anybody in her family that she has won money. They will tear her to pieces for that money.

AuthenticM · Apr 1, 2022

yeah talk to your mom about all this, share your worries with her, and try to get her to get a lawyer and an accountant who will help her with this.

Friggz · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

came to post this.

Cantaim · Apr 1, 2022

I got nothing to say other than OP I feel for you. Would be shitting my pants at how getting that much money could go wrong.

Also sorry about your aunt and grandma OP.

ParanormalFupa · Apr 1, 2022

yeah just read that Reddit thread.

Idde · Apr 1, 2022

Does your mother know/agree she isn't that good with money? Her knowing this could help a bit with taking measures to ensure she doesn't lose/spend it all immediately. If need be with some help from you.

HStallion · Apr 1, 2022

jwk94 said:
Do the rest of the fam know she's getting any money? If not, don't tell em a single thing.

Seriously. You'll have family members you never even heard of coming out the woodwork looking for a hand out

Smokey_Run · Apr 1, 2022

The biggest concern/question, does she recognize her issue with finances?

My mom refuses to acknowledge it. I've tried to talk to her about budgets, how to spend less at the grocery store, etc. I'm met with resistance IMMEDIATELY. I, too, have to loan her money. I just had to loan her money and I really wanted to say something, but I didn't and just handed her some cash to get her through to her next social security check (she burnt through in two weeks as much as I did in a month which makes ZERO sense to me).

I would say she needs a lawyer and/or a financial advisor. Are you open to the idea of at least being put on the accounts so you can track transactions? Would she be OK with that? Would your siblings be OK with that?

I wish you the best because this hits so close to home with a parent that isn't able to manage their finances and being the one who has to step in to help. I straight up told my mom if she ever won the lottery, I'm claiming the ticket, and I'll make sure she's taken care of because that money would be gone in 6 months.

Condolences on the loss of you grandma and aunt.

Brannon · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

Read this with her if you can.

Mammoth Jones · Apr 1, 2022

jwk94 said:
Do the rest of the fam know she's getting any money? If not, don't tell em a single thing.

I can't stress this enough. This is the key point: Keep that on the hush hush.

Wereroku · Apr 1, 2022

To add to this you might want to meet with a CPA as well and go ahead and get her taxes sorted out so she knows how much she needs to go ahead and put away for that. Also if she knows she is not good with money then a trust that only allows her to use so much per year is an excellent way to go with that amount of money. That's what we did with one of my relatives that has some mental difficulties when they inherited a bunch and was afraid they wouldn't be able to manage it all themselves.

Neoleo2143 · Apr 1, 2022

Financial advisor that is extremely vetted and a lawyer. Be specific in that you want a fiduciary above all else since they are legally required to act in your family's interest.

AMAGON · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

I support this post.

I have it bookmark whenever my luck changes and needed it lol 🥲

Annubis · Apr 1, 2022

Dank Lotion said:
My question for you ERA is how can I help her? She obviously sees this as a "blessing", but I can't help but be afraid of how much chaos this is gonna cause for her. Are there any financial advisors she should get? What are the do's and don'ts of what to do with it?

Split the money into two accounts. One account will receive xyz$ per month from the other account and that one she will have full control of it.
The other account with all the money will require both of your consents for operations.

HotsauceDragon · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

"Now you're fucked. No really. You are. You're fucked."

Starting that whole thread with this was a stroke of genius.

Idde said:
Does your mother know/agree she isn't that good with money?

There're some exceptions out there for sure, but I don't think I've ever met a single person who's willing to admit they're not good with money. There'll always be some bad luck excuse.

Itaremustbedangeres · Apr 1, 2022

Yes, the reddit post is a must-read!!!!!

Prevent her from immediately touching the money if you can. There'll be a bazillion things she most likely will want to do with it like buying a car, a house etc etc. give relatives xyz some money so they are taken care off and what have you.

I also second the notion of not telling a single soul about her newfound wealth and if possible not even your siblings at least for the foreseeable future until she has a financial advisor.

But yeah, a financial advisor is super important in this situation.

Hollywood Duo · Apr 1, 2022

Financial Advisor is must, sell it to her that they'll get her even more money.

demosthenes · Apr 1, 2022

Dank Lotion said:
... and I'm terrified.

To make a sad story short, my grandma and special needs aunt died due to EXTREME neglect at a nursing home a couple of years ago. My mom has been fighting them tooth a nail with her lawyers and is about to win a case that will net her 8 figures.

We've never had that kind of money in the family and my mom has always been terrible with finances. I've consistently had to loan her cash throughout my adult life. Which I have no problem with because... she's my freakin mom. Not to mention everyone in the family has constantly used her as a doormat my whole life (to include my siblings). I've already told her I want none of it. I'm single, no kids, with a really good paying job so I want to be the last person she has to factor in for this money.

My question for you ERA is how can I help her? She obviously sees this as a "blessing", but I can't help but be afraid of how much chaos this is gonna cause for her. Are there any financial advisors she should get? What are the do's and don'ts of what to do with it?

I don't want my mom to end up like the people who have won lotteries (in debt, family torn apart; etc). With how batshit her side of the family is and her history with finances I can see this getting extremely messy for her. Plus, she's already started having health issues and is only about to turn 60 this year. Maybe I'm just overreacting but I just don't see this not being extremely stressful for her. 🙁

Seek out a lawyer to setup trust(s). Seek out a financial advisor who is a fiduciary and if possible works on a fee based approach (not a % of assets).

All else fails, put 80% of the money into something like Vanguard's VTSAX or VTI.

Make sure she has a will / health care proxy setup. Make sure you're her power of attorney and not some nut jobs from her side of the family.

Deleted member 70788 · Apr 1, 2022

Financial advisor now.

DON'T TELL ANYONE.

She needs to listen ASAP.

General advice would be:
Take a chunk to pay off any high interest debts if she has them.
Set aside a small chunk of "fun money" if she wants
Everything else should get invested

If it's multi millions she can live comfortably off the interest assuming she doesn't go bonkers on lifestyle creep.

That said also depends on how much. If we're talking 3 millions, that's amazing depending on how your lives are, but that's not going to mean you can live like royalty forever.

If it's 10million plus, you are going to be able to have a more consistent massive lifestyle change.

Don't squander it. Easy come, easy go.

StarStorm · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

This reddit post has really good info already.

I would have said to get a lawyer and set up a trust fund, but it already has that listed on that reddit post.

Lumination · Apr 1, 2022

I need to +1 the find her a fiduciary, and not any old "financial advisor". Unlike advisors, fiduciaries are bound by law to make decisions for your mom's best interests.

Fiduciary Definition: Examples and Why They Are Important

A fiduciary is a person or organization that acts on behalf of others and is legally bound to act in their best interests.

www.investopedia.com

Kill3r7 · Apr 1, 2022

Congrats. It sounds like your mom will be able to retire.

If I were in her shoes, I would consult with a financial advisor/accountant but pay close attention to their fees. Do the same with an Trust and Estate attorney. You should probably do that asap to assure she limits her tax exposure.

Mesoian · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

Yup. This.

Just make it so even she would have to jump through hoops and talk to multiple people if she wanted to do big spending with the money.

Lakeside · Apr 1, 2022

When my father passed, I sold my dad's business for a smaller, seven figure sum. My mother never had any financial acumen, other than a knack for shopping. My dad always invested in his own business.

I set her up with a trusted financial advisor and she also enlisted an attorney that is a family friend. This will be 22 years ago this coming Monday and everything is fine.

9wilds · Apr 1, 2022

Surakian said:
You aren't overreacting. You need to get her a lawyer and financial advisor. Vet them very well. Also remind her that she needs to set more than half of it aside for taxes. She's in a completely new bracket now.

A trust would be a great option for her.

You have to convince your mom to not tell anybody in her family that she has won money. They will tear her to pieces for that money.

She might not need to pay taxes. But she should get a tax attorney to make sure.

firehawk12 · Apr 1, 2022

Have an advisor set up basic low/medium risks investments where she (and anyone else in the future) can live off the interest payouts indefinitely and basically never touch the principle unless there are some big one time purchases that need to be made.

Dank Lotion · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

Oh my god thank you. I've been reading through this for the last 15 mins and this may be exactly what I needed! It's a little overwhelming though.

jwk94 said:
Do the rest of the fam know she's getting any money? If not, don't tell em a single thing.

Mammoth Jones said:
I can't stress this enough. This is the key point: Keep that on the hush hush.

This was literally the first thing I told her not to do. The problem with my mom is, when it comes to money she can't keep a secret to save her life. Once I started making a decent living for myself she started blabbing (bragging) about it to the whole family, which resulted in me having relatives I'd never heard of reaching out to me for handouts. Luckily I started distancing myself from the whole crazy ass family as soon as I turned 18, so it was no sweat off my back telling them to eff off. Unfortunately I can't see her listening to me and not telling anyone about this. This case has been years in the making and I know she's been at least hinting to people that she'll be able to retire off the settlement.

Cantaim said:
I got nothing to say other than OP I feel for you. Would be shitting my pants at how getting that much money could go wrong.

Also sorry about your aunt and grandma OP.

I appreciate it. I'm trying to remain calm for my mom, but I really am freaking out a little about it.

Idde said:
Does your mother know/agree she isn't that good with money? Her knowing this could help a bit with taking measures to ensure she doesn't lose/spend it all immediately. If need be with some help from you.

Everytime I lecture her on her money management she just agrees with me and says she'll do better and.... end up doing the same things again. I think it stems from being a single parent and really having to spend everything in order to survive. She can never hold on to money or save. I feel like I'm really going to have to step in for this, but I'm really scared about how she's going to take that and how it might even affect our relationship. I don't want her to interpret it as me trying to get a "piece of the pie" like I KNOW the rest of the family will be doing.

Teflar · Apr 1, 2022

You can also have part of the settlement annuitized. Take a look into Structured Settlements. You can allocate a portion of the settlement to provide lifetime monthly income tax free since its part of the settlement. The rates of return are low and they're hard to get out of since they're part of a legal settlement, so you'll want to make sure to keep a part of the settlement in cash. Also, Tax advisors are good too, but the problem is they can't guarantee anything. If the market goes bad, she could lose her investments. Annuitizing the settlement a good way to insure a guaranteed monthly income for as long as she's alive while allowing her to invest the remaining settlement in other ways.

thediamondage · Apr 1, 2022

Yeah get a lawyer, financial advisor, and tell them you want to set things up such that your mom cannot give away tons of the money to family (including you) quickly.

Trusts, annuities, retirement accounts, etc there are a LOT of things to do to make it so she can live off the money it makes and not spend it crazy fast.

My mom has a roth IRA, annuity, and the house she owns is in a trust with her and 2 grandkids in the trust (passes to them when she dies). There are things you wanna structure so stuff like nursing care can be purchased when she needs it, but keeps most of the money nearly impossible to give away to family. Because SOME family member will definitely want to suck up as much of that money as they can get.

A good lawyer who specialises in trusts and estate planning will be able to navigate it all over a few hours, they charge a lot - I think we paid $6k for my parents trust/will - but its worth it. Get some recommendations, look up reviews, etc.

Culex · Apr 1, 2022

Get a lawyer that specializes in trusts and start a living trust. Silo your money into annuities and follow your financial advisor so you don't end up living under a bridge or worse.

Dank Lotion · Apr 1, 2022

Smokey_Run said:
I would say she needs a lawyer and/or a financial advisor. Are you open to the idea of at least being put on the accounts so you can track transactions? Would she be OK with that? Would your siblings be OK with that?

She's always had me listed as the main beneficiary for her life insurance, will; etc. So I wouldn't be too surprised if she might be ok with listing me on the accounts. I'm just really hesitant about it because I'm not sure I want anything to do with it or how she would take me bringing this up. My siblings for sure would have a problem with it, but I doubt she'll pay them any mind.

demosthenes said:
Seek out a lawyer to setup trust(s). Seek out a financial advisor who is a fiduciary and if possible works on a fee based approach (not a % of assets).

All else fails, put 80% of the money into something like Vanguard's VTSAX or VTI.

Make sure she has a will / health care proxy setup. Make sure you're her power of attorney and not some nut jobs from her side of the family.

She's had me in her will as a POA for years now. I've never thought anything of it because she's always been, well... broke. Now I'm just like... fml. I'm probably going to have to step in for this and have to deal with all kinds of family drama when I've been enjoying my life being AWAY from all of that lol.

Lumination said:
I need to +1 the find her a fiduciary, and not any old "financial advisor". Unlike advisors, fiduciaries are bound by law to make decisions for your mom's best interests.

Fiduciary Definition: Examples and Why They Are Important

A fiduciary is a person or organization that acts on behalf of others and is legally bound to act in their best interests.

www.investopedia.com

Teflar said:
You can also have part of the settlement annuitized. Take a look into Structured Settlements. You can allocate a portion of the settlement to provide lifetime monthly income tax free since its part of the settlement. The rates of return are low and they're hard to get out of since they're part of a legal settlement, so you'll want to make sure to keep a part of the settlement in cash. Also, Tax advisors are good too, but the problem is they can't guarantee anything. If the market goes bad, she could lose her investments. Annuitizing the settlement a good way to insure a guaranteed monthly income for as long as she's alive while allowing her to invest the remaining settlement in other ways.

Thanks so much for this info. I had no idea what a fiduciary was or Structured Settlements. It's a little overwhelming but it's great to have these options. I'm especially interested in possibly having a guaranteed monthly income for her. That sounds like that would be the best situation for everyone.

Kastanjemanden · Apr 1, 2022

Throw it into an account and live off the interest.

Grue · Apr 1, 2022

That Reddit post seems to have stood the test of time!

But mostly I wanted to say sorry for the circumstances that led you here, OP, that's horrific.

I hope your mom can salvage some happiness from it.

echoshifting · Apr 1, 2022

An 8-figure settlement is probably enough to become self-perpetuating, generational wealth if you handle it right. I would recommend one of the big trust management/investment firms. I work with Bessemer and I'd be happy to try to put you in touch with someone. Look into them and if they seem like a good fit, drop me a line.

Note that you will still need an attorney and should consult with them before you take this advice.

Idde · Apr 1, 2022

Dank Lotion said:
Everytime I lecture her on her money management she just agrees with me and says she'll do better and.... end up doing the same things again. I think it stems from being a single parent and really having to spend everything in order to survive. She can never hold on to money or save. I feel like I'm really going to have to step in for this, but I'm really scared about how she's going to take that and how it might even affect our relationship. I don't want her to interpret it as me trying to get a "piece of the pie" like I KNOW the rest of the family will be doing.

It's still her money, perhaps you don't even have be responsible for it. But perhaps it can be put away in such a way that she literally can't get to it (without a LOT of hassle), but where it still makes money collecting interest or...I don't know, I'm not a financial expert. That way she can live off the interest or investment or something without getting persuaded to give it away or spend it. You can still be the one to help her set it up (which it sounds like you're doing, judging by how the thread is going), but it's not in your name. Thus avoiding the whole you seeming to want to get a piece of the pie thing.

Eight figures is a LOT of money. I'd think it's up to her to decide if she wants to spend some/help family out. As long as there is enough left, safely left, to ensure a livelihood for the rest of her life.

And it doesn't sound like she's completely opposed to working with you when it comes to finances, and you have a good relationship with your mom. Which is a good starting point for this. Could be much worse.

And if everything turns out okay, congrats on having a mum, who used to always be broke, not having to worry about that anymore.

Drek · Apr 1, 2022

Dank Lotion said:
Thanks so much for this info. I had no idea what a fiduciary was or Structured Settlements. It's a little overwhelming but it's great to have these options. I'm especially interested in possibly having a guaranteed monthly income for her. That sounds like that would be the best situation for everyone.

With an eight figure settlement, even at the lowest end ($10M) she could reliably see an annual income well in the six figure range without touching the principal balance. If she wants to be able to help family and the like maybe suggest to her that she sets up split management of the payouts where she'll get say, $150-$200K per year for all her living expenses and an additional $100K per year to help people out with, in entirely separate accounts?

Foltzie · Apr 1, 2022

echoshifting said:
An 8-figure settlement is probably enough to become self-perpetuating, generational wealth if you handle it right. I would recommend one of the big trust management/investment firms. I work with Bessemer and I'd be happy to try to put you in touch with someone. Look into them and if they seem like a good fit, drop me a line.

Note that you will still need an attorney and should consult with them before you take this advice.

This, you need a fiduciary and not just a financial advisory (who are not required to work in your best interest). Lock up the principal (maybe in a trust) and convince your mom to live off the yearly proceeds.

Lumination · Apr 1, 2022

I'm thoroughly in the camp of smart investing and locking in wealth growth here.

That said, there is something to be said for your mom enjoying the money too. I'm sure not everyone will be able to experience in their lifetime being able to help out their whole family in a financial matter. Maybe she does want to splurge on a house for her and her siblings to live in together or something.

Point is, lock in a good chunk (I'd argue for vast majority), but I also wouldn't be so tunnel visioned to deny her idk, 10/20/30% of that lump sum to just.... enjoy her time on this earth in a way that's afforded to very few.

And she may also have her own reservations about this money -- it could be seen as essentially blood money. Sit down and really have a couple of long conversations about what she wants and what she needs.

SilkySm00th · Apr 1, 2022

So unless the whole family already knows TELL THEM NOTHING

Not a single word. Not an update, not a hint, not the tiniest inclination of how much she won in the suit or anything. Ever.

Financial advisor to help her setup that money where it can make it's own money, live off the annual return on that money and never work another day in her life. Take lots of vacations. IF she insists on helping out family or distributing the money show her the advantages of setting up trusts for grandkids and such. Let her decide how to construct and distribute money in her will and then never thing about finances again.

As long she isn't taken advantage of and follows the advice of a good financial advisor she should be set

echoshifting · Apr 1, 2022

Lumination said:
I'm thoroughly in the camp of smart investing and locking in wealth growth here.

That said, there is something to be said for your mom enjoying the money too. I'm sure not everyone will be able to experience in their lifetime being able to help out their whole family in a financial matter. Maybe she does want to splurge on a house for her and her siblings to live in together or something.

Point is, lock in a good chunk (I'd argue for vast majority), but I also wouldn't be so tunnel visioned to deny her idk, 10/20/30% of that lump sum to just.... enjoy her time on this earth in a way that's afforded to very few.

A good fiduciary can set things up so the beneficiary of a trust can withdraw from the principle within a reasonable limit fwiw, the dispensation can be pretty generous for someone near retirement age

Lumination · Apr 1, 2022

echoshifting said:
A good fiduciary can set things up so the beneficiary of a trust can withdraw from the principle within a reasonable limit fwiw, the dispensation can be pretty generous for someone near retirement age

Yep! Just want OP to know to not forget the obvious topic when looking for lawyers and fiduciaries. We can easily get lost in the sauce with future growth and forget our time here is finite.

Ra · Apr 1, 2022

oakenhild said:
Not sure if this is good advice, but it always seemed like it (the old reddit 'i won the lottery' post):

What's the happiest 5-word sentence you could hear?

**So, what the hell DO you do if you are unlucky enough to win the lottery?** This is the absolutely most important thing you can do right away:...

np.reddit.com

The bit about ONLY going to a renowned nationwide firm and ONLY accepting a senior partner is flat out bad advice. You'll end up paying 50x more for the name alone, when an experience estate attorney from around the way will be experienced at the task and far less of a ticket to get the job done properly.

That's like saying "you have money now, only buy Gucci", which is contradictory to their advice on not blowing your winnings.

Karateka · Apr 1, 2022

put it all into dividend paying stocks.
At 5% return (a lot of high div stocks will pay even more than 5%) assuming there is 10 million in the settlement fund, your mom will make 500,000 a year for life, just off dividends.

My mom is about to become a multimillionaire...

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