Amid Powerball fever, Indialantic lottery lawyer offers jackpot advice

INDIALANTIC — With Saturday's Powerball jackpot zooming past the $570 million plateau, plenty of Space Coast lottery players are daydreaming of hitting the numbers, cashing their ticket immediately, ditching their job and living a fabulous new lifestyle.

But those choices can prove unwise, said Kurt Panouses, an Indialantic attorney and CPA who has built an unusual cottage industry representing lottery jackpot winners.

Consider the carefree young Key West couple who hit a $7 million jackpot during the 1990s. They drove to Tallahassee to claim their prize in a party bus, quit their jobs, lived in a hotel for a couple months — and quickly blew through their first annual payment, Panouses said.

Afterwards, they transferred their future lottery proceeds to a cash-up-front company that advertised on television. Panouses labeled their fiscal mismanagement "a tragedy."

On the flip side of the spectrum, he represents David Kaltschmidt and Maureen Smith. The Melbourne Beach couple bought a Powerball ticket in January 2016 at Publix on State Road A1A, winning a one-third share of $1.6 billion — the biggest lottery jackpot in history.

Kaltschmidt, a manufacturing engineer at Northrop Grumman, and Smith, a homemaker, secretly consulted with Panouses nights and weekends for 20 to 30 hours per week for a month before claiming a tidy lump sum of $328 million, before taxes.

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The couple chose Feb. 17, 2016, as the date to claim their ticket in Tallahassee and unveil their identities to national media. Panouses was surprised to learn why: They first wanted to attend a Pat Benatar concert at the King Center for the Performing Arts on the 12th.

“ 'We don’t want to be fussed over at this concert. We want to enjoy ourselves at the concert,' " Panouses recalled. “I go, ‘Do you have front row seats?’ And she goes, ‘No, we’re in the upper deck.’ I go, ‘Do you want me to get you front row seats?’ ‘No, no, no, we just want to be in the upper deck like everyone else.’ ”

Indialantic attorney helps Powerball winners

“They were the ideal couple, because they had no agenda that had to really be taken care of. They were very comfortable with themselves and the decisions they were making. They were both very educated people, in the sense of street education,” Panouses said.

"They have made several gifts to charities, and they've done it anonymously. They don’t need the notoriety. They don’t want the notoriety. They’re doing fine. They haven’t really changed their lifestyle," he said.

"I’m proud of both of them, because you hear a lot of horror stories — and I've represented people in the past that went through their money. Dave and Maureen have done a very good job of being stewards of these funds, and helping family and charity," he said.

Panouses has represented 15 to 20 lottery winners of jackpots topping $1 million from Brevard, Florida and elsewhere. As the current Powerball jackpot passed the $300 million mark, he was interviewed in the conference room of his Indialantic law office for a Dec. 30 appearance on ABC's "Good Morning America."

He said lottery winners should neither sign the back of their ticket nor cash the ticket without seeking advice on tax ramifications and legal issues.

“Historically, I have found people who win over $1 million can’t sleep. They don’t eat. They’re very nervous. I can’t put myself in their shoes, but they’ve always been very uneasy. And so, everyone wants to go right away and get it over with," Panouses said.

"The problem is, they don’t think through a lot of these issues about their own protection and safety," he said.

After Kaltschmidt and Smith hit the Powerball jackpot, Panouses had their relatives sign confidentiality agreements before disclosing the news. He also sent documentation and communicated with Tallahassee lottery officials using "a dummy email and a dummy blocked cell phone" before revealing the winners' identities.

Had a Powerball player hit the numbers in the Dec. 27 or Dec. 30 drawings and claimed the ticket right away, Panouses said the IRS would have taken a bigger chunk of that jackpot.

"The tax rates have changed. Last year, the maximum rate was 39.6. Now, with the new tax law, the max rate is 37. So that's a 2.6 percent difference. When you talk $300 million to $400 million — or more, at this point in time — it's $7 million to $10 million. That's material," he said.

Panouses also discourages a common practice: the workplace lottery pool.

"There's always something that could go wrong. There's always someone that was 'in' that's no longer 'in,' or that wished they were 'in' and forgot. Or someone bought the tickets for everyone, then bought one for themselves — and the one for themselves really was the winner, but everyone's saying, 'No, that's part of this,'" Panouses said.

"I've never been a fan of groups going in to buy tickets. It’s wrought with potential major litigation."

Contact South Brevard Watchdog Reporter Rick Neale at 321-242-3638, rneale@floridatoday.com or follow @RickNeale1 on Twitter.