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Jackpots Hit $532 Million - Do These 5 Things if You Win
Sunday December 15th 2019There are some seriously festive jackpots up for grabs this week, with Mega Millions at $372 million for Tuesday's draw - the 14th largest prize in the game's history - and Powerball at $160 million for the next draw on Wednesday.
With the holiday season in full swing, rising jackpots are delivering lots of excitement, with a Mega Millions draw on Christmas Eve and a Powerball draw on Christmas Day!
If you are lucky enough to hit one of these jackpots, you need to take steps to protect both yourself and your wealth before you start enjoying your big win.
"The days between the drawing and the day you claim will be your last days of normalcy," says Jason Kurland, a New York lawyer who's an expert in helping lottery winners. "You want to have a clear head so you can get through a stressful but exciting time."
Here are the five things you must do to protect your prize (after you finish screaming and jumping up and down)!
Sign Your Ticket
It's crucial that you sign the back of your winning ticket right away. If the ticket doesn't have your name on it, anyone could sign it and claim the win. That's right: lottery tickets are bearer instruments, so whoever signs the ticket can file a claim and get the payout. You should also keep the ticket in a safe place - so definitely don't lose it on the floor of a truck or let anyone rip it up.
Protect Your Privacy
While you'll want to shout about your win from the rooftops, experts say this is the worst thing you could do. Although it's tough, you need to keep the number of people who know about your good fortune as small as possible. "The last thing you need is people asking for handouts, or friends and family offering advice about how to claim the money," Kurland advises.
One matter to consider is whether you will be able to stay anonymous. Only a handful of states allow lottery winners to keep their identity private.
However, even if your state requires the winner's name to be made public, you may still be able to claim via a trust to maintain your privacy.
If you won't be able to remain anonymous, think about changing your phone number to protect yourself from media intrusion and requests for money. You should also consider getting out of town for a week, allowing the most intense media attention to die down.
Get Advice
That winning ticket will be burning a hole in your pocket, but don't be in a rush to claim immediately. Take a step back and plan for how you will manage this life-changing amount of money. You will definitely want to involve reputable professionals, including a lawyer, financial planner and tax advisor.
The anonymous South Carolina woman who won the $1.5 billion Mega Millions jackpot in October 2018 showed enormous patience, taking 131 days to claim her prize! She spent the time looking into how to manage her incredible win with the assistance of lawyers and financial advisors.
It's also a good idea to chill out and not make any quick decisions after you claim. "For at least a few weeks or a month, abstain from making any money moves with your winnings," says Farnoosh Torabi, a personal finance author and podcast host. That's because any decisions you make "will likely be fueled by a lot of adrenaline and influence from friends, family and random wealth managers weighing in."
Torabi advises that you "take time to reflect with your family on how you would like to make the most of this money to create a more fulfilling life, make an impact and - importantly - make it last."
Claim Your Prize
Powerball and Mega Millions winners have anything from 90 days to one year to claim. The amount of time varies by state, so make sure you check your state's rules. You don't want to accidentally let that win slip through your fingers like the very unfortunate player who let a $14.8 million prize expire in Arizona.
If you don't claim by the deadline, the state decides what happens to the money. Usually it's split between good causes in the state, like education and infrastructure, and funding future lottery prizes.
Choose Cash or Annuity
Lottery winners can receive their winnings in one of two ways: cash or annuity. The "cash option" is a single lump sum, whereas the annuity entails 30 annual payments spread over 29 years. The cash amount is smaller than the advertised jackpot, whereas with the annuity you are guaranteed to receive the full jackpot amount.
In fact, Kevin O'Leary, a financial expert and investor on "Shark Tank," advises lottery winners to take the lump sum, but "pay yourself an annuity, and put the excess cash flow to work for you. More money up front means more money to invest and grow." However, that doesn't mean making high-risk investments: "You've won financial freedom," O'Leary says. "Don't screw it up!"
Personal finance expert Suze Orman says it all comes down to whether you have the expertise to manage the lump sum. "To know where to invest hundreds and hundreds of millions of dollars is very difficult," she says. "If you feel capable of investing it, if you feel capable of managing it ... take the lump sum." However, she says the annuity will often be the right choice for someone who doesn't have the experience of managing large amounts of money.
Either way, Uncle Sam will put his hand out, with the IRS subtracting 24% in federal withholding before the winner is paid. And since the top marginal tax rate is 37%, the winner will be paying higher taxes when they file their next return. In addition, most states also collect taxes on big lottery wins, which will either be taken before the payout or due later, depending on the state.
There Are 6 More Chances to Win the Christmas Jackpots ...
There are still a few opportunities to hit these amazing jackpots during the holiday season, and since you can purchase tickets online you don't even have to venture out into the cold for your chance to win!
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