Los Angeles Times

Lottery winner needs an advisor.

A trustworth­y financial planner can help determine a safe spending rate for woman’s windfall.

- By Liz Weston Weston is a personal finance columnist for NerdWallet. Questions may be sent to her at 3940 Laurel Canyon, No. 238, Studio City, CA 91604, or by using the “Contact” form at asklizwest­on.com. Distribute­d by No More Red Inc.

Dear Liz: I’m a middleaged, single, childless woman who won a very nice lottery prize. I took the “cash value” option and after paying federal tax, I was left with $1.2 million. I would like to pay cash for a home, have a tidy nest egg put aside and have money for travel and other occasional luxuries. I also receive a disability pension of $1,800 a month, which includes medical and dental benefits. Do I need a financial planner at this point? I was figuring I knew what to do, but may need an expert to help me go about doing it. Answer: One of the things you’ll notice, if you haven’t already, is how people will come out of the woodwork to “help” you with your money. Some position themselves as advisors, while others will be offering “business opportunit­ies” or just looking for handouts.

You would be smart to seek out a trustworth­y fee-only financial advisor to help make the most of your money and to deal with all those who want to part you from it. The phrase “That sounds interestin­g — let me run it past my financial planner” can short-circuit a lot of importunin­g.

The planner can help you determine a safe spending rate for your windfall and discuss some issues you may not have considered, such as the need for more liability insurance (since you’re now a bigger lawsuit target) and a plan to pay for long-term care.

The advisor you want won’t be found at your doorstep or in your email box, begging for your business. The best planners are too busy advising to run after lottery winners. You can find referrals to fee-only planners at the National Assn. of Personal Financial Advisors (www.napfa.org) and the Garrett Planning Network (www.garrettpla­nningnetwo­rk.com). Interview at least three and make sure that they’re willing to sign a fiduciary oath to put your interests first.

Clash over their mother’s estate

Dear Liz: My husband’s mother passed away in January. His younger sister was executor of the estate. His mother had investment­s of close to $1 million prior to 2008. She supposedly lost half her investment­s with the downturn. When she passed away, my husband’s sister said that there was nothing left in the estate. What documents can he ask to see in order to make sure the estate is totally depleted? There wasn’t even a will shown to him. Answer: If your mother-inlaw had a will, or if she died “intestate” — without any estate planning documents — the sister would be required to open a probate case to settle the estate. Probate proceeding­s are public so your husband would be able to see an accounting of what’s left.

If your mother-in-law had a living trust, the sister wouldn’t have to open a probate case but she may be required to provide trust documents and an accounting of the estate to beneficiar­ies and heirs. The exact rules depend on the state where your mother-in-law died.

If the sister balks at providing this informatio­n, your husband may need to take her to court. He’d be smart to consult an attorney familiar with the relevant state’s laws.

Grandchild seeks loan co-signer

Dear Liz: My granddaugh­ter, who will graduate from college in a year, has asked me to co-sign her third private loan, which will bring her total debt to $30,000. She needs three people to co-sign. Her parents and the other grandparen­ts have agreed and she wants me to be the third party. I love my granddaugh­ter and trust her intentions, but I really don’t like co-signing a loan for anyone. If I refuse, I’ll really be in the doghouse. Is there any way I could guarantee that I would only be responsibl­e for this loan if the others don’t pay? Answer: Co-signers are equally responsibl­e for paying a debt. There isn’t a hierarchy. If your granddaugh­ter fails to pay a loan, it will affect the credit reports and credit scores of anyone who co-signed that loan.

It would be unusual for any student loan to require three co-signers. What she may have meant is that her parents co-signed her first loan, her other grandparen­ts co-signed the second and now she wants you to co-sign the third.

In any case, there’s no way to get the guarantee you want. If you’re not comfortabl­e co-signing, don’t. Your family members should be the ones in the doghouse if they pressure you in any way to go along with this scheme.

 ?? Kena Betanchur AFP/Getty Images ?? LOTTERY WINNERS see how people will come out of the woodwork to “help” them with their money. Some position themselves as advisors, while others will be offering “business opportunit­ies” or looking for handouts.
Kena Betanchur AFP/Getty Images LOTTERY WINNERS see how people will come out of the woodwork to “help” them with their money. Some position themselves as advisors, while others will be offering “business opportunit­ies” or looking for handouts.

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