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Top 5 Asset Protection Strategies for Lottery Winnings
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Top 5 Asset Protection Strategies for Lottery Winnings

August 9, 2023 Professional Services Industry Legal Blog

Reading Time: 4 minutes

Winning the lottery is undoubtedly a life-altering event. However, with this newfound wealth comes an unwanted spotlight, as lottery winnings are often a target of lawsuits, creditors, scams, and sometimes even friends and family seeking financial assistance or investment opportunities.

Here are five asset protection strategies to consider that can help shield lottery winnings effectively:

Strategy #1: Utilize Tenants by Entireties Ownership 

In Florida, married couples qualify for a unique form of asset ownership called tenants by the entireties (TBE) that provides substantial asset protection. Any assets (including real property, personal property, stocks, and even bank accounts) that meet TBE requirements are protected from the creditors, debts, and liabilities of a single spouse. For example, if one spouse incurs debt or faces a lawsuit, TBE assets generally cannot be touched by creditors of that spouse. To meet TBE requirements on assets, couples must have been married when the asset was obtained, possess joint ownership/control, and have identical interests in the asset that are received simultaneously on the same instrument, with rights of survivorship. Moreover, neither spouse can unilaterally make decisions regarding TBE assets and the surviving spouse becomes the sole owner of TBE assets upon death, bypassing probate.

Strategy #2: Place Assets in Trusts

Trusts are powerful tools for both asset protection and estate planning. By placing assets in a trust, they are managed by the trustee for the benefit of named beneficiaries according to the terms of the trust documents. There are various trust types, such as Revocable Living Trusts, Irrevocable Trusts, Charitable Trusts, Special Needs Trusts, and Generation-Skipping Trusts, each offering unique tax advantages and levels of creditor protection. Trusts are an integral part of estate plans that provide tremendous asset protection tools and can preserve wealth for generations.

Strategy #3: Invest with LLCs

Limited liability companies (LLCs) are most often considered when starting a new business, but also can provide an excellent asset protection tool for making investments. LLCs are a type of legal entity that can be used for acquiring real estate, lending money, or purchasing stocks or bonds. When structured correctly, LLCs create a protective barrier from liability that ensures personal creditors cannot access LLC assets, and conversely, LLC creditors cannot access personal assets. Separate LLCs can also be created for each investment to further shield assets owned by different LLCs from creditors of a single LLC.  In essence, by leveraging the inherent legal benefits of LLCs, individuals can not only pursue diverse investment avenues but also fortify their financial assets against potential external liabilities.

Strategy #4: Limit Debt and Personal Liability

As you come into substantial wealth, you might find more credit opportunities available. While tempting, taking on more debt without a clear financial strategy or hiring an attorney to review the loan documents can expose you to more risks. When borrowing money through an LLC, avoid signing personal guarantees that could render you personally liable for failed investments. Furthermore, consider obtaining insurance policies, which can provide an extra layer of liability protection, mitigate loss risks, and safeguard against potential lawsuits and claims. Protecting wealth requires a blend of prudence, legal guidance, and strategic planning to ensure long-term financial security and minimize potential liabilities.

Strategy #5: Written Contracts

Whether you are looking to invest in a business venture, lend money, or simply engage in any transaction, ensuring the terms of the deal are clearly articulated in a well-drafted contract is imperative. Written contracts should precisely define the terms of the deal, including key terms like the investment or loan amount, repayment schedules, interest rates, and contingencies. Beyond basic terms, a contract should also provide for indemnification and specify repercussions for potential breaches or defaults, ensuring legal clarity and protection of your investment. When loaning money, especially large amounts, securing the loan with collateral offers an additional layer of protection. In essence, having a solid written contract will protect financial interests and ensure you do business on your terms.


Winning the lottery is a life-changing event, and with great fortune comes great responsibility. By implementing these asset protection strategies, lottery winners can ensure their wealth is safeguarded against potential risks and pitfalls. It’s always wise to engage with professionals who can provide asset protection guidance tailored to individual circumstances and ensure a prosperous and secure financial future.

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