There’s a $750 million Powerball jackpot up for grabs. Here’s what to do if you’re named the winner.
1. Assemble a team of experts
Winning the lottery is not as simple as cashing your ticket and buying your dream home.
When you become a hundred-millionaire, it’s imperative that you understand the implications of your new-found fortune. Assemble a team of experts who can assist you with your wealth management goals. At a minimum, your team should include a financial, legal and tax advisor to help manage your investments, tax planning, insurance and estate planning, among other important aspects of managing your wealth.
While hiring advisors can be a smart move, remember this: only you are in charge of your money. Therefore, always sign your own checks so you can trace your spending.
2. Remain anonymous (if you can)
Some people win the lottery and can’t wait to quit their job and flaunt their wealth.
That’s when your neighbors, coworkers, long lost cousins, and “friends” from high school suddenly appear eager to spend more time with you. That’s why your best move is to stay anonymous. If you are a lottery winner who lives in one of six U.S. states, you’re in luck. You can choose to remain anonymous in Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina. If you decide to remain anonymous, one way to protect your identity is to accept your lottery prize through a legal structure such as a trust. An attorney can help you establish the appropriate legal entity.
The remaining states, including Washington, D.C., Puerto Rico and the U.S. Virgin Islands require that winners publicly disclose their identity, including their name, city and prize amount.
3. Sign your lottery ticket
Make sure to sign your winning lottery ticket.
A lottery ticket is considered a bearer instrument, which means that whoever signs the ticket can claim the lottery prize. The name you sign depends.
If you live in a state in which you can remain anonymous, you may choose to form a trust to accept your Powerball prize. Consult your team of advisors to determine what is best for your specific circumstances.
4. Decide between the lump sum and annuity payments
If you’re the next Powerball winner, you must choose either an upfront, lump-sum cash payment or annuity payments.
With the lump-sum payment, you receive the approximately $465.5 million in cash now in a single payment (minus withheld taxes and a discount rate for receiving the cash upfront). Or, you can elect to receive annuity payments that total $750 million (pre-tax) over the next 30 years (and you’ll be responsible to pay income taxes as you receive the payments).
“A dollar today is worth more than a dollar tomorrow” goes the general financial lesson about the time value of money. The lump-sum payment is preferable if by investing the lump-sum today you’ll end up with more than the (after-tax) annuity payments over the 30 years.
However, if you’re concerned about spending your money too quickly, then choosing the annuity payments may be more prudent. It’s not necessarily the best financial choice, but it may keep you organized and clear of financial loss.
5. Get your financial house in order
Before you buy mansions, yachts and a G5, your first move should be to pay off debt.
With some types of consumer debt, you could keep your balances outstanding and earn a higher financial return in the stock market. But why? As a hundred-millionaire, do you really want to worry about monthly debt payments? Get out of debt first and wipe your slate clean.
Powerball Lottery Q&A
How do you play Powerball?
Choose five numbers from 1 to 69 and one Powerball number from 1 to 26. You can also select Quik Pik and the numbers will be selected automatically for you.
Where can I play Powerball?
The Multi-State Lottery Association administers Powerball across 44 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands. You can’t play in these six states: Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah.
How much does it cost to play Powerball?
Each ticket costs $2. There is no limit to the number of tickets that you can purchase.
What are the odds on winning the Powerball jackpot?
The odds of winning the Powerball jackpot are about 1 in 292 million.
If there is no winner and the jackpot increases, what are the odds of winning the next Powerball jackpot?
The odds always remain the same at about 1 in 292 million, and do not change based on the dollar size of the Powerball jackpot.
Is this the largest Powerball jackpot in U.S. history?
The largest Powerball jackpot in U.S. history was about $1.6 billion in January 2016, which was split among three winning tickets. This is the fourth largest Powerball jackpot in U.S. history.
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