Windfall’s pitfalls
After pocketing a $1 million Make Me Rich jackpot last fall, Detroit-area lottery winner Amanda Clayton is getting a trial-by-fire lesson in the challenges of having wealth.
First, the unemployed single mother triggered a minor uproar by continuing to accept public assistance after claiming her prize. When a local news station asked about groceries purchased using a public-assistance card, she argued that she was still unemployed and needed the help. (Michigan hadn’t counted lottery winnings as disqualifying income, but the outcry over the incident led the state to cut off sweepstakes winners’ benefits.)
Further fanning the flames is what she did with the money: Ms. Clayton took a lump-sum instead of an annuity, receiving about $500,000 after taxes, which she has largely spent on a house and a new car.
“When someone who is not working gets a windfall, there tends to be an issue with squandering,” said investment specialist Anthony Agbay, senior vice president of investments at Leonard & Co. Inc., the largest independent brokerage in Michigan.
“If she had taken the 20-year payment plan, we wouldn’t be having this discussion,” he said. Most lottery winners choose to take the lump sum, and a large percentage of them blow through their fortune fast.
Attempts to reach Ms. Clayton for comment were unsuccessful.
Learn more about reprints and licensing for this article.
