You suddenly came into money? Here's what to do.

There is a responsible way to manage coming into a large amount of money, allowing it to last long-term. Wells Fargo Head of Advice Relations Emily Irwin joins the Live Show to offer tips for stretching unexpected cash.

Irwin's first tip is to assemble a team of interdisciplinary professionals, including an attorney, CPA, insurance specialist, philanthropic specialist, and more. Advisory groups allow an investor to construct a plan, devising short and long-term goals. Shorter-term goals could encompass aggressively attacking revolving debt and high interest-rate loans, while in the longer term, investors should begin thinking about estate tax and asset protection.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's Note: This article was written by Gabriel Roy.

Video transcript

BRAD SMITH: Well, the Mega Millions jackpot drawing is tonight and the prize, the big one is over $1 billion. What would you do with that cash? As the popular social media phrasal template goes, if I ever win the lottery, I won't tell anyone, but there will be signs. That's right, don't be surprised by my newly constructed manatee sanctuary or my sudden stake in the Philadelphia Eagles. All kidding aside, there is a responsible way to manage coming into a large amount of money, and importantly, make it last for the rest of your life, and make sure the right people get it after you won.

Now to break this down for us, we have Emily Irwin who is the Wells Fargo wealth and investment management managing director. Emily, I'm not sure what you would do with that kind of money, but hey, we can toss around some ideas. But what can people do to ensure that they are stretching those dollars if they do come into unexpected cash?

EMILY IRWIN: Well, you're starting with the right mindset, which is not make any big public decisions. But certainly put together a team so you can start building a foundation of what your future looks like. And this is a real opportunity for individuals to be able to put together a team of interdisciplinary professionals-- attorney, CPA, insurance specialists, potentially even social media specialists, philanthropic specialists, and asset protection specialists to be able to put together a plan for them.

They really want to think about short-term and long-term goals. And you really want to focus on not just the dollars and cents at this point, but what are your goals and values. And to the last segment, how is this going to not just affect your pocketbook? How is it going to affect your family, your emotions, and your social interactions?

BRAD SMITH: Certainly. And so let's kind of break this out into two areas here, the short term and the long term. Short term, a lot of people are immediately like, OK, well, I've got to pay off some debt here and there. But long term as well, what is the thinking that they should be positioning as we're, kind of, thinking about what that immediate or more imminent decision-making financially is versus some of the extended time horizon?

EMILY IRWIN: Yeah, so short term, you obviously first want to consider how are you going to take the winnings. And so you want to think about the lump sum versus the annuity payment. Lump sum, of course, you're going to get your winnings, you're going to pay a fairly large tax assuming you have that $1.1 billion ticket.

And then you're going to have some additional tax bills come next year because they're only going to withhold 24%. Plus, you're probably going to have some state taxes depending on where you live. So that's number one.

An annuity is a really good idea if you're someone who has $1 dollar in your pocket, you're going to spend $1.50. The annuity might be a good plan for you because it's going to be consistency over a number of years. By contrast, the lump sum's advantage is you get to have freedom with respect to investments, spending, saving, and giving.

The other thing you really want to think about is debt. To your point, it's something that you can clean up on your balance sheet in a very confidential way. However, rates in the most recent years have been low.

So if you have, for example, a mortgage rate that's at 2% or really anything under 4%, you might consider just letting it lay for a little bit. But you do want to aggressively attack anything like revolving debt, higher interest rate loans, student loans, anything of that nature that's above that 4% threshold. Let's really start throwing dollars to that.

BRAD SMITH: And just last--

EMILY IRWIN: Yup, go ahead.

BRAD SMITH: You know, I just wanted to add on this additional thought here, too. As we think about the protection of that money, is it possible to insure and protect some of those winnings?

EMILY IRWIN: Absolutely. So this is the more long-term plan. Longer term, you're thinking about things like gifting, estate tax, asset protection. So you want to make sure you're meeting with your advisors.

This year, you're lucky the estate tax exemption is $13.61 million. That is fantastic news for anyone who's going to be able to start doing some lifetime planning because that means you can set up various types of trusts potentially that you or your loved ones may still have access to. Maybe not full control over, but you still may be able to access and benefit yourselves, your family, or community while moving those assets off your balance sheet.

You also might consider things like life insurance not for income replacement, but maybe you're going to diversify into illiquid assets. And you want to make sure you have liquidity on your balance sheet to pay anything like an estate tax. You put those in a trust as well because while they pass income tax free to beneficiaries, they don't pass as estate tax free. So you really want to look at long term how can you move the growth off of your balance sheet. And because it's an election year and we know January 1, 2026, the estate tax laws, from a federal perspective, are set to sunset and go back to $5 million indexed for inflation, now would be the time to start that planning.

BRAD SMITH: Emily, thank you so much. I already know what I'm doing. First and foremost, I'm going to legally change my government name to first name Bless, last name Highly Favored. Emily Irwin who is the Wells Fargo wealth and investment management managing director, thank you so much for taking the time.