As we go to press, more than $135 million is up for grabs in the Powerball jackpot. The chance to win a cool $25 million from Mega Millions will take place this Friday. Ever think of what you’d do if with all that cash? Would you take it in a lump sum or opt for regular payments? While there’re lots of lists that say what you should do if you have the winning numbers, we’re going to tell you things you definitely should not do.
Tell everybody and their neighbor about your winnings.
There are six states that allow lottery winners to remain anonymous indefinitely – unfortunately, Arizona is not one of them. Legislation passed last year, though, enables lottery winners of $600 or more remain anonymous for 90 days after the prize money has been awarded. Because you have up to 180 days to collect the prize, you can keep your name hidden for up to 9 months. Rest assured, every friend and relative that you’ve ever had will ask you for money. There are even worse things that can happen, like becoming a target for kidnappers. Keep in mind that earlier this year, a Georgia man who had won nearly half a million dollars was brutally murdered during a home invasion.
Opt for the up-front cash rather than the extended payout.
If you’re like most people and go for the up-front cashout, you’re actually getting just slightly more than half of the jackpot total. If you opt for the extended payout, the state will take the present-day cash value of the jackpot and buy bonds or an annuity that will generate enough interest to fund your future payments. Taxes are a big consideration as well. In a lump sum payment, you’ll be on the hook for income taxes on the full amount in the year you received the money. In an extended payout, you’ll owe taxes only on the total amount you’re paid each year.
Suddenly become a high roller living the high life.
Trading in a relatively simple life to one filled with spending hundreds of thousands per week can be a painful transformation. Unfortunately, developing an expensive palate and treating your friends and family to around the world cruises can get real expensive, real fast. Remember that your winnings are limited. Unless you have a way to keep other revenue streams flowing, leave the entourage to people looking to go bankrupt. Trying to keep up with the Joneses is difficult enough, but trying to keep up with the Kardashians and other celebrities simply isn’t worth it.
Give away the whole thing to a charity.
Rather than giving the whole amount away to a charity, religious institution or other cause, remember that you can do just a much good with your money by structuring your will and estate so that it’s given at the time of your death.
Buy everything for everybody – including yourself.
While you definitely don’t have to be a cheapskate, it’s important to remember that multiple houses and multiple vehicles, etc. all come with annual tax bills and other expenses. Also, buying everything your friends and family want is an easy way to start a dependency relationship that will suck your winnings dry.
For Smart Financial Advice to Get Out of Debt, Call The Oswalt Law Firm
If you’re like many people who are drowning in debt, daydreams about winning the lottery can be a welcome escape. While we want you to win, the odds of getting out of debt are far better with skilled advice from professionals who know the laws and procedures. For a free consultation, call us here at The Oswalt Group at (602) 225-2222.
