Fantasy is all you are going to get unless you beat the nearly impossible 1 in 292,201,338 odds. A few years ago, even the “Powerball people,” (whoever they are) realized that fantasy sells and decided to make it harder to win. They increased the amount of numbers to pick from to engineer bigger jackpots. People didn’t merely fantasize on being a millionaire, but rolling like Trump in the billionaire class.
Let’s say you have that 1 in 292,201,338 ticket. You’ve checked the winning powerball numbers twice. It’s real. Your heart is racing. Your mind is full of thoughts. You want to scream it from the rooftops and call work and let them know you will certainly not be coming back.
Already this year, the Powerball has produced the world’s largest jackpot. $1.3 billion in an annuity or just over $800 million in a lump sum payment, even minus taxes, was beyond life changing. It approaches a half billion again. Your life will change and everyone will want to know your story.
As the Powerball climbs again, I am going to throw reason out the window and relay some advice that made our website go nuts a few months back and let you guys drift off to that pipe dream. Here are six tips from a lawyer in case you literally “hit the lottery”:
(1) Put the ticket in a waterproof and fireproof place and do NOT talk or post about it.
Get that piece of paper into protective custody. Better yet, go buy a safe or rent a safe deposit box if you don’t have one. At the same time, keep the premise of winning safe. Do not post about it on social media. Certainly, do not put a photo of it and/or its bar code anywhere. Bragging can come after its claimed.
Make safe moves, and by all means, don’t show it off or brag about it. It’s like Kenny Rogers said (with my own personal remix):
Every gambler knows
That the secret to survivin’
Is knowin’ what to throw away
And knowin’ what to keep (locked in a safe)
‘Cause every hand’s a winner
And every hand’s a loser
And the best that you can hope for is to die
in your sleep (and not at the hands of a thief).
(2) Sign it and lay claim to it immediately.
Sign the back of the ticket immediately. That may sound crazy, but on the back of the ticket is where the owner puts their information (name, address and phone number) when they turn it in. Stake your claim to your winning ticket immediately. A lottery ticket is a bearer instrument. The person who holds it holds its title. That means possession is often the primary consideration. Although disputes can happen and custody can be disputed, whoever signs the ticket and presents a photo ID can claim the prize. You may be requested to verify where you bought it and/or how you obtained custody. Sign it so even if someone takes it, it creates an immediate presumption that it is/was yours.
Leave plenty of room in case you decide to put it in the name of a corporation or trust or add other beneficiaries. Don’t go crazy and sign the whole thing. You may need to add “member,” “partner” or “trustee,” etc.
You won’t get paid for a month or so, according to most sources. This not only gives you time to get things in order, but can be an excruciating wait.
(3) Consider calling a lawyer and a tax professional.
Third, call a lawyer. As an attorney, I am biased (and would certainly accept your call), but find a good lawyer you hopefully know and trust and make an appointment. Do NOT agree to allow them a percentage of your winnings or anything crazy like that. If they ask… that’s the wrong lawyer. Just find someone who you trust and come up with fair retainer and/or hourly compensation to help you make good decisions and protect you from people who will look to separate you from your windfall.
Uncles and Aunts will be there ready to take- especially Uncle Sam. Make sure you get advice on the front end. You won’t believe the tax issues which could come up- state taxes, federal taxes, gift taxes, corporate taxes and other taxes even the game Monopoly didn’t try to make up. The lawyer can help with this, as they have a fiduciary (financial) duty to you. This may also assist you in making the decision about whether you want payments over 30 years or a one-time lump sum payment. It’s not as easy as one might think at this level of money.
Here is our summary of tax issues- Taxes: Win the Lottery? Uncle Sam (and Aunt Samantha) will be First in Line.
We do not recommend following in the footsteps of the characters in Fear and Loathing in Las Vegas, which was based on two trips to Las Vegas, Nevada, that Hunter S. Thompson took with his attorney Oscar Zeta Acosta in March and April 1971. They mostly lived in a drug filled haze. While we may be cool with a trip to Vegas, you can have a better, more logical plan.
(4) Can you claim anonymously or as a business?
Find out if your state allows anonymous claims. Powerball tickets are sold in 44 states, as well as in Washington, D.C., the U.S. Virgin Islands and Puerto Rico. As of last time we looked, all but six states require lottery winners to come forward publicly. Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina allow winners to remain anonymous. Many other states are in the process of enacting such laws- some may even require you to donate some money to charity if you want to remain anonymous. Other states permit winners to create limited liability companies, so that when their names have to be announced, it’s the companies and not individuals that are identified. Think seriously about that.
15 minutes of fame is great, but you will have people coming out of the woodwork and your name will be all over. You may (and likely will) regret that in months or years down the road. It is more trouble than it’s worth going public if you can help it. Certain Lottery Commissions will not release the winnings until a press conference is completed, while others give more consideration to the winner’s desire to remain outside of a fishbowl.
(5) Avoid sudden moves and help yourself find ways to say “no”
Fifth, think seriously about putting a wall around yourself and your new found riches. Prior lottery winners have funded a trust or set up another fund or process and allowed those wanting money to submit an application or submission. Let someone else run that. No Exceptions. Otherwise, you will be one of those who go broke or spend more money than you should because saying no is a hard thing to do. There are plenty of good causes and you can do great things, but you need a system.
Certainly, people want to go out and change their lives. And that’s fine, but be reasonable. The decisions you make in the first three months with this money will define how long you have this money. You don’t want to just be rich. You want to have wealth.
(6) Don’t be a jerk
Finally, don’t let it go to your head. Avoid sudden extravagance. Money has made too many people into, well, jerks.
Also, while this guy was honest, his spending strategy may not be best:
Finally, don’t be a woe-filled story. Statistics show lottery winners often find terrible fates. Here are some more stories of the bad days which may follow:
Want More Advice?
Be sure to check out our other post- Taxes: Win the Lottery? Uncle Sam (and Aunt Samantha) will be First in Line.
Be sure to check out our other tips:
We invite you to review our verdicts, our accolades and awards and what clients have to say about us and give us a call for a free consultation where our lawyers will consult with you personally. John represents clients in Florida, Georgia and Alabama and before the U.S. Supreme Court with passion and compassion. Our firm handles a wide variety of injury and death cases, criminal defense, family law and a host of high profile matters. We can be emailed at [email protected] or call us at (904) 444-4444.