Most of us can imagine becoming vastly wealthy overnight. We know being a winner of a multimillion dollar lottery is going to be a life-changing event.

But what about when the prize is an astronomical sum in the hundreds of millions? If you happen to be lucky enough to win a lottery, writer Jon Ogg of 24/7 Wall St tells us how to avoid some of the simple mistakes that have taken other lottery winners into bankruptcy.

24/7 Wall St has listed 12 key things not to do if you are a lottery winner:

* Don't forget to sign a ticket or report it to the state. After doing some research, we find this is apparently the simplest and easiest error to make. Can you imagine losing a lottery ticket? Then imagine what can happen if someone else snags your ticket and shows up to collect the prize.

* Don't tell everyone you know. If you win this much money, chances are high that you will to want to brag about it. How could you not? The problem is that telling everyone you know before you collect puts you in danger, and in more ways than just one. Everyone who has ever done anything for you now may come with their hands out asking for something.

* Don't automatically decide to take the up-front cash. If you get $172 million up front, it may sound better than having to receive a payout of $300 million slowly over the course of a lifetime. Best go see a tax pro and a legitimate investment advisor at a top money management firm.

* Don't think that you are the smartest person to manage your money and finances. If you go from living paycheck to paycheck, does it sound right that you will know the best things to invest in and the best tax and asset protection strategies? Your drinking buddy might not be the best choice either.

* Don't keep your debts. If you get the "I'm rich and don't have to pay anymore" bug, you might be dooming yourself. Whether you take the lump-sum or the annuity option, if you have a single penny of debt in the immediate future and distant future, then something is seriously wrong.

* Don't become the generous high-roller, living the life. If you go from living a simple life to instantly being able to spend hundreds of thousands of dollars (or more) per week, what do you think happens to your expectations in life ahead? Chances are high that you will want more of the same. Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast.

* Don't buy everything for everyone. Do not go out and buy dozens of cars, followed by houses and whatever else, for you and your friends and family members. This will start you on a bad path, and you could easily become the next friends and family personal welfare department.

* Don't ignore having a budget. Maybe it sounds crazy that you have to live within means when you get empire-making money. After all, you are now wealthier than everyone you know combined. This also goes back to having advisors and being prudent, but at the end of the day you do still have a finite sum of money.

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* Don't become the business backer for all your friends and family. One common theme that has come up with lottery winners who suddenly get vast sums of cash is that their friends and family start pitching them on endless business ideas. If someone has no knowledge of a particular business and does not know what it takes to actually run a business, they won't do any better because a lottery winner who lucked into vast wealth gave them money to start it.

* Don't give it all away. Some people might want to give away just about all of their money to a charity or to their religious institution. Should you be charitable? Absolutely! Should you give it all away? Absolutely not!

* Don't get celebrity and athlete envy. Keeping up with the Jonses is bad enough, but definitely do not try to keep up with the Kardashians or other celebrities. You can go broke real quick. Just ask people like Nicolas Cage, Wesley Snipes, MC Hammer, Evander Holyfield and many other famous people who had it all and ended up broke how they feel about things.

And finally, don't think that laws and decency standards no longer apply. It is true that the wealthier you get, the better attorneys and legal defense you can afford.

But living a reckless life without concerns about the laws of the land will not keep you out of trouble with the law.

Read the full article here: 24/7 Wall St