Receiving an inheritance can be like winning the lottery.  What could be wrong with that?  Ask these lottery winners.

Callie Rogers, age 16, won $3.1 million in a British lottery.  By the age of 22, the unwed mother of two, having attempted suicide twice, and having spent over $400,000 on cocaine alone (in addition to more conventional luxuries), was broke, living with her mother, and working three cleaning jobs.  She described her sudden windfall as having ruined her life, and she was looking foward to finding happiness once her winnings were gone.

American Willie Hurt also won $3.1 million, but in the 1989 Michigan Lottery.  Two years (and a great deal of crack cocaine) later, he was not only broke, but had lost his marriage and custody of his child, and was facing attempted murder charges.

William "Bud" Post won $16.2 million on the Pennsylvania Lottery in 1988.  Within five years of his windfall, he cursed the day it happened.  According to the Washington Post, "his problems included a brother who tried to hire a contract murderer to kill him and his sixth wife; a landlady who forced him to give her one-third of the jackpot; and a conviction on an assault charge," after he had fired a shotgun at a bill collector who came to call at his deteriorating dream home.  By the time he died in 2006, Mr. Post had gone from scooping up annual lottery payments of $497,953.47 to scraping by on $450 per month in disability compensation.

Jack Whitaker won the largest Powerball payout in history.  It took him only four years to blow through $113,386,407.77 (after taxes) in 2002 West Virginia Lottery winnings.  By his own estimate, he gave away $14 million to his church and other charitable causes, but he went from being a well-dressed, successful businessman to being a slovenly strip club patron who didn't care whether husbands or boyfriends were nearby when he offered women money for sex.  His impact on the lives of his loved ones was even more tragic.  He started out with the best of intentions when he made lavish gifts to the apple of his eye, his granddaughter Brandi.  She, unfortunately, spent her new-found wealth on everything but what her grandfather would have wanted.  Her riches financed a trip in the fast lane down the road to drug addiction with several hangers-on in tow.  One of them was found dead of an apparent drug overdose in Whitaker's mansion.  Ultimately, Brandi ended up dead under circumstances that pointed to murder.

So what will your loved ones do with what you leave behind for them?  The above examples are extreme, but they show how a sudden windfall can quickly turn from a blessing into a curse.  The lesson applies to all of us, when you consider that a life can be ruined over far less than those unfortunate lottery winners received.  But dumping boxes of cash on your beneficiaries is not your only option. 

Rather than give your loved ones direct access to what you leave behind, you can give them their inheritance in trusts, administered by people or institutions who will provide good judgment and wise guidance.  Those trusts can contain provisions to protect your beneficiaries from bad habits, opportunistic friends and family members, and their own lack of wisdom and experience.  You can even add a variety of conditions to your gifts.  You can condition distributions from trusts upon such things as the beneficiary's passing a drug test, holding a steady job, or staying out of jail.  You can also impose positive conditions, such as directing your trustees to make larger ongoing distributions to beneficiaries who are maintaining a certain grade point average or meeting other standards of achievement.

Your legacy deserves to be passed on in a way that will genuinely benefit your loved ones.  Sometimes that takes "adult supervision" (even for people who are over the age of 21), and sometimes it takes a little bit of delayed gratification.  There's no harm in being creative about how you achieve your estate planning goals.  For some ideas, consult your trusted advisors and people who have been on the giving and receiving end of large gifts.  Our website,, provides additional guidance.


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