We all fantasize about what we'd do if a pile of money dropped into our laps. If you're like me, your plans have probably changed a bit as you've gotten older — dorm-room conversations about blowing it all on a far-flung vacation and a new car have turned into dinner party chats about paying down debt, sending the kids to the college of their dreams and spreading the wealth among family members. But the truth is, you don't know how you'd handle a financial windfall until it hits you square in the face. And even then, the idea of sudden wealth leaves some people feeling paralyzed. That's where Susan Bradley and her Sudden Money Institute come in. Some time ago, Bradley realized that there was a gap in the financial-planning market. People hit with large amounts of money — from an inheritance, a fantastic new job or the lottery — were struggling to adjust. "We all have ideas of what more money would do for us and what we would do with it," says Bradley. "But even if you think you're prepared for it, my experience is that it's usually different than what we expect. It's more complex, and has more human elements than financial elements." That's because a sudden rush of money is very often tied to an emotional event, like the death of a family member, a divorce or lawsuit settlement.So what do you do when a casual dinner party conversation turns into a reality?Sit on your hands"Honestly, the first thing to do for almost anyone is to not do anything," says Jeanne Brutman, a financial planner in Long Island, N.Y. "Put the money in the bank — get a decent rate of interest, of course — then sit and breathe for a week or two." We've all read newspaper articles about lottery winners who blew through their payout within a year. They went on spending sprees, made irrational investment decisions or gave large amounts of money away without thinking it through. Sudden windfalls are nearly always tied to a stressful event (even winning the lottery can keep you up at night), so it's really best to let the excitement or grieving period pass before making any big decisions. Meanwhile, put the money in a high-interest savings or a money market account. Don't make empty promisesIn fact, don't make any promises. Ever seen the Nicolas Cage movie "It Could Happen to You"? In it, he promises a waitress half the money if a lottery ticket proves fruitful; needless to say, it does. And his marriage dissolves when the ticket is a winner and he pays up. An extreme case? Absolutely. But casual comments to even the closest of family members can backfire in the end. If you want to spread the wealth — and I agree that it's great to share — it's best to surprise them after you've spoken with a professional.Seek counsel
You're definitely going to want a financial planner, and — depending on how much cash — very likely a lawyer and an accountant. The ins and outs of big money and its tax implications are just too complex to tackle on your own. Bradley also recommends bringing in someone who specializes in organization. "Usually with a big life change like this, there's a lot of paperwork and a whole new set of unknowns," she explains. Having someone who can sort through the paperwork while you focus your attention elsewhere can be a huge help. The National Association of Professional Organizers (napo.net) can be a good resource. Consider how the money fits into your financial picture
A lot is going to depend on what your finances looked like before the windfall. If you don't have any debt (and that means credit card, mortgage and loans), you really have a lot of freedom. You'll want to max out your retirement accounts, if you're not already doing so, set up an emergency cushion and make sure you have adequate insurance coverage. Then you can start dabbling in the market more, giving to charity and even splurging a little with anything that's left over. If you're in the hole, however, your best bet is very likely going to be paying off the debt first. With a few exceptions, chances are good that any interest you might earn from investments is going to be less than what you're paying on your debt. Even if it's not, the relief of being free and clear is priceless. Hang on to old habitsMore money doesn't mean you can spend willy-nilly. Keeping the same money-management routine will make your money last longer, so if you're used to tracking your expenses, there's no need to stop. "More money does not mean you can spend what you want," advises Diahann Lassus, a financial planner and president of Lassus Wherley in New Jersey. "No matter how much money you have, it still makes sense to understand where you are and what you can afford to spend." Give yourself a little freedomAfter, and only after, you've had plenty of time to think and consult with a couple of pros, do or buy something that you really want. That could mean a couple new outfits, a vacation or home improvements. My suggestion? Splurge a little on yourself and your family, and then give back to your community. Not only will it make you feel good, but you'll also get a tax deduction. "Giving and sharing and having a little splurge, there's usually room for that and it's a good thing," says Bradley.
With reporting by Arielle McGowen.
Jean Chatzky is an editor-at-large at “Money” magazine and serves as AOL’s official Money Coach. She is the personal finance editor for NBC’s “Today” show and is also a columnist for “Life” magazine. She is the author of four books, including “Pay It Down! From Debt to Wealth on $10 a Day” (Portfolio, 2004). To find out more, visit her Web site, .