Mega Millions and Powerball jackpots are over $ 400 million
mphillips007 | iStock Unreleased | Getty Images
With Mega Millions and Powerball jackpots both surpassing $ 400 million, there are probably a lot of players dreaming about how to spend such a cascade.
They may even think about what they do as a winner before the money actually reaches them. That is to say, there would be some major decisions to be made even before thinking about going to the lottery headquarters to claim the prize.
“It’s extreme wealth,” said Walt Blenner, a lawyer and founder of Blenner Law Group. “You really need to have everything in order.”
The Mega Millions jackpot reached an estimated $ 405 million for Friday night’s draw after no ticket matched all six numbers drawn Tuesday. The first Powerball prize pool is $ 432 million for Wednesday night’s draw.
While the chance of a single ticket to winning first prize in every game is minuscule – 1 in 302 million for Mega Millions and 1 in 292 million for Powerball – it’s still worth considering how you would treat such an advantage if you beat the odds. .
Here are three immediate considerations for winners.
Which is what it says
It is best to share the news with only a small group, experts say
“Tell as few people as possible,” Blenner said. “That means your nuclear family, even if I say don’t tell the kids other than to make a vague reference about how there will be changes in your life to come.”
You may also be able to protect your identity from the public, depending on what state you are on. Even if only a handful allow winners to remain completely anonymous, you may be able to claim your prize through a trust or limited liability company that does not have your name.
More from Personal Finance:
Here’s how to get a tax-exempt income in retirement
If you win the bet on football, don’t forget about the tax
Top 1% dodges $ 163 billion in annual taxes, says the Treasury
In general, this means getting the help of professionals. You have to put together a team that includes a lawyer, a tax advisor and a financial advisor – all of whom are experienced in helping lottery winners navigate their advantage.
How to take your winnings
You can choose between receiving your winnings as a lump sum of cash or as an income spread over three decades. However, the money will be taxed when you receive it.
Most lottery winners choose to get a lump sum. For the $ 405 million Mega Millions jackpot, the cash option is $ 294.7 million. For the first Powerball prize pool of $ 432 million, it’s $ 313.5 million.
Keep in mind that now, federal income taxes are low from a historical point of view – and it’s impossible to know where they may be years from now. This means that from a tax perspective, it could cost more to take annuities because tax rates are more likely to increase than to decrease.
When to claim
In general, lottery winners come from a few months to a year old to claim their prize, depending on the state. This means you don’t have to rush to general headquarters the next day to discover your good fortune.
It will take a while to get everything set up, Blenner said. This includes meeting the team that will guide you.
“It takes a while,” he said.
Meanwhile, be sure to make a copy of your ticket and put it in a safe place, such as a fireproof box or safe in a bank.
Source link
