Napolitano looks at money.

It’s ironic that many lottery winners, athletes and inheritors go broke due to gross mismanagement of their recent windfall. If you are, or will soon be the lucky recipient of a large infusion of money– do not change your lifestyle or do anything radical until you make a plan.

Your plan must start with assessing the amount of the windfall. The amount you receive day one may not really all belong to you. Take taxes for example, some of these possible large windfalls may be taxable upon receipt or taxable upon converting an asset to cash. You don’t want to find out after you’ve spent the money that Uncle Sam has a target on your back for unpaid taxes.

Even before investing the money, take the time to discern how much risk you’re willing to take and how much you need that money to grow. This is a fairly easy math exercise, but it is a bunch of estimates that don’t really mean anything on day one. To improve the chance that this forecast comes to fruition requires frequent measurement (at least annually) to see if any course corrections are needed.

If you are very conservative, for example and plan to invest all of your windfall in guaranteed savings accounts, there are a few courses of action to consider. First, make sure that you are getting the best rate on your deposits. Your local bank is likely to pay you more than their advertised rate if your windfall is large enough. Check the online banks as they frequently have a more reliable version of attractive rates rather than teaser rates to get you to open an account.

If you have debt that is costing you more than your savings, pay if off. It doesn’t make sense to set up a savings program for a large windfall only to carry debts like autos, homes, school loans or credit cards.

Check to see if there are any new, ongoing tax consequences to your windfall. Income taxes are likely to rise as your income is likely to rise along with the new windfall investment income. But other costs, such as death taxes may be a bigger issue for you after the windfall.

Ensure that your estate plan is current. You’d hate to pass away post windfall with a dysfunctional and outdated set of estate documents. If you become a good steward with inherited or windfall assets, your beneficiaries may learn from your example and be equally savvy when the windfall makes it to them.

Identify any excess funds. Another math exercise, but you should know how this amount affects your needs for financial independence. If you can plan for this windfall such as the sale of a business or other valuable asset, this can be done ahead of the sale. You may choose to exhaust some or all of your excess through gifts to family, charity or getting some things done from your bucket list.