For Powerball Winner, Financial Planning Now Can Avert Pitfalls Later

March 27–Winning the Powerball jackpot solved a lot of Pedro Quezada's problems. But it has raised a whole new set of issues for Passaic's$338 million man.

"This money is going to be a burden; it'll be a great blessing, but it's going to have weight that comes with it," said Karl Graf, a fee-only financial planner in Wayne.

Graf and other financial advisers interviewed on Tuesday said that Quezada, 44, should take his time to research and put together a team of trustworthy professionals — including an estate lawyer, accountant and wealth manager — to help him handle his stunning windfall.

"He's got to go with someone he trusts. He's got to go with someone who has a reputation and has been around a long time," said Lauren Locker, a fee-only financial planner in Little Falls and president of the National Association of Personal Financial Advisors.

She and the others said Quezada should interview a number of people and ask how these professionals are paid — for example, does a money manager take a percentage of the assets being managed, or commissions on investments? The lottery does not offer any financial advice or other help for winners, said Judith Drucker, a New Jersey Lottery spokeswoman.

Drucker said Quezada has decided to take a lump sum payment of $211 million, which comes to about $152 million after state and federal taxes. The money, which is typically deposited directly into the winner's bank account, should be available in two to three weeks, Drucker said.

Graf said he would recommend that the Quezada family change all their cellphone numbers to protect themselves from the entreaties of everyone they know (and many they don't know).

And Tom Orecchio of Modera Wealth Management in Westwood said Quezada may want to set up family trusts and partnerships to protect the family's privacy and guard against frivolous lawsuits. At this level of wealth, many people set up family offices with full-time professionals managing their money, he said.

In investing, Quezada might want to spread the money among several different financial firms. He would also be advised to allocate it among a number of investments, like stocks, bonds and real estate, advisers say. That offers protection if one financial firm fails or one type of investment falters.

And Quezada has to ask some big questions. What does he want to do with his life now that he doesn't have to work?

"Everyone has to have a purpose," Graf said. "Once you get beyond the thrill of, 'I can go golfing whenever I want,' you have to find a purpose to life."

When his jackpot was announced, Quezada, a Dominican immigrant, said he wanted to help others.

If that's the case, Graf said, he may need to get professional help in focusing his charitable intent. He can't just write checks to people because "that opens you up to being taken advantage of," Graf said.

"This amount of money could support generations and generations of individuals," Orecchio said.

"The issue there is do you take away incentive and wind up with trust fund babies?" The answer, said Orecchio, might be a charitable foundation that involves Quezada's five children in helping others.

"His world is about to change in ways he doesn't even understand yet, good and bad," Orecchio said.

Staff Writer Michael Linhorst contributed to this article. Email: lynn@northjersey.com

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