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2 J. Pract. Est. Plan. 41 (2000-2001)
Sudden Wealth

handle is hein.journals/jrlpep2 and id is 89 raw text is: Estate Planning/April-May 2000 Sudden Wealth By Gerald Butrimovitz looks at the sudden wealth syndrome' Gerald Butrimovitz and reviews the development of money maturity. Larry Stone just won the lottery. Fifteen million dollars all at once! Larry and his wife, Julie, were looking forward to a life of unlim- ited luxury. One year later, they were broke. How did this happen? His brother-in-law needed a busi- ness loan. He gave his friends ex- travagant gifts and bought a Porsche for himself. His wife went on a spending spree at Tiffany's. They bought a new house in Malibu. Their $50,000 a month mortgage payment became a bur- den. Huge property taxes came unexpectedly. The credit card companies became less and less forgiving on extending them credit. And then the taxman came at the end of the year and said they owed over $6 million, which was $6 million more than they had because it was already spent. The sudden wealth syndrome produces sudden prosperity as well as sudden loss, both person- ally and financially. Sudden wealth syndrome may affect many people including inheritors, lottery winners, some recently divorced who may have receive a large settlement and those who receive lump-sum distributions from re- tirement plans or settlements. Those who receive sudden wealth will often go through many emo- tional stages ranging from surprise to undue anxiety. Inheritors must now confront new responsibilities such as investment management, tax management and estate tax issues. It is no wonder inheritors often say, You do not know what it is like to be in this position. Why Money Creates Emotional Turmoil Turmoil, generally, is the first emo- tional state of those who experi- ence sudden wealth syndrome. However, every person reacts dif- ferently to money. The word money evokes different emo- tional responses in people, such as opportunity, responsibility, free- dom, pressure and control. Our parents created a view about money in our childhood that lin- gers in our adult subconscious and may surface during periods of stress. We may have resented pa- rental control that was exercised Gerald Butrimovitz, Ph.D, CFP, is a financial planner, in San Francisco, CA. He is on the estate planning councils of Santa Clara-Silicon Valley and San Francisco and is a member of the philanthropy boards of several Bay area charities. He is President Emeritus of the Technical Securities Analysts Association. moneydoctor@ix.netcom.com 02000 Gerald Butrimovitz

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