Split lottery jackpot winners

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11 members have voted

August 11th, 2010 at 8:48:39 AM permalink
Wizard
Administrator
Member since: Oct 14, 2009
Threads: 631
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Quote: Nareed


Hot dang! That looks like just what I needed. Thanks! This will keep me busy for a few days. Stay tuned for my analysis.
It's not whether you win or lose; it's whether or not you had a good bet.
August 11th, 2010 at 8:50:04 AM permalink
konceptum
Member since: Mar 25, 2010
Threads: 33
Posts: 790
Even though this has nothing to do with the original question, the OP should still have this kind of information, if he/she doesn't already. Basically, if you are participating in some type of lottery pool, you should know that only one legal entity can win the lottery. Usually, that's one person. In other words, if you have 10 people in your lottery pool, and the lottery jackpot is $100 million, one person is going to get a payment of $100 million, and have to pay taxes on that $100 million. If he has $50 million left over, and then decides to give the other 9 people $5 million each, they are each going to have to pay income tax on the $5 million they receive. Most people in lottery pools don't realize this cumbersome fact.

Naturally, if you win the lottery for a large amount, you should immediately hire an attorney and an accountant to handle all the tax implications. This will help you avoid this problem. However, it's also easy to know that a simple contract, written out and signed by all parties PRIOR to the drawing will result in the GROUP being the legal entity, and thus each person would receive $10 million, and have to pay tax on the $10 million.

Legally, it would be improper to have such a document prepared and signed after the drawing, and dated as if it had been done before the drawing, but that's not to say that it hasn't been done before....

Also, I guess you could make sure that the lottery in your area really will pay out separate checks to each member in the group. It used to be that some states wouldn't do this, but I haven't kept up on lottery practices, so I don't know if this is still true or not.
August 11th, 2010 at 9:03:11 AM permalink
Nareed
Member since: Nov 11, 2009
Threads: 367
Posts: 11365
Quote: Wizard
Hot dang! That looks like just what I needed. Thanks! This will keep me busy for a few days. Stay tuned for my analysis.


You're welcome. Maybe I am gifted at extracting useful info from the web...

I think I'll go look up "next drawing's winning number" now ;)
You can visit my blog Kathy's Cooking Corner at kathyscookingcorner.blogspot.mx ... .... When someone offers you friendship with one hand and stabs you in the back with the other, you tend to notice the knife a little bit more.
August 11th, 2010 at 9:10:37 AM permalink
miplet
Member since: Dec 1, 2009
Threads: 5
Posts: 1198
Quote: Nareed
You're welcome. Maybe I am gifted at extracting useful info from the web...

I think I'll go look up "next drawing's winning number" now ;)

4 8 15 16 23 Megeball 42
August 11th, 2010 at 9:24:00 AM permalink
Doc
Member since: Feb 27, 2010
Threads: 27
Posts: 5110
Quote: konceptum
Basically, if you are participating in some type of lottery pool, you should know that only one legal entity can win the lottery. Usually, that's one person. In other words, if you have 10 people in your lottery pool, and the lottery jackpot is $100 million, one person is going to get a payment of $100 million, and have to pay taxes on that $100 million.
Don't think that's the case at all. I think all of the major lotteries will split up a jackpot if you provide a statement signed by all of the pool members showing the share for each.

Here is a quote from www.powerball.com/pb_contact.asp:
Quote:
CAN INDIVIDUALS IN A GROUP CHOOSE CASH AND ANNUITY?
CAN INDIVIDUALS IN A GROUP DIVIDE THEIR SHARE UNEQUALLY?

An individual lottery may have rules about how they will pay a winner (how many checks; how many winners to process, etc.) but we can handle any request to divide the prize payments. We can divide the prize however the individuals in a group wish, including requests for cash or annuity. But again, an individual lottery's rules will apply and most lotteries have not had to consider this question.
August 11th, 2010 at 10:27:18 AM permalink
Nareed
Member since: Nov 11, 2009
Threads: 367
Posts: 11365
Quote: miplet
4 8 15 16 23 Megeball 42


I'll play it. If I win anything I won't let you know ;)
You can visit my blog Kathy's Cooking Corner at kathyscookingcorner.blogspot.mx ... .... When someone offers you friendship with one hand and stabs you in the back with the other, you tend to notice the knife a little bit more.
August 11th, 2010 at 10:50:39 AM permalink
rdw4potus
Member since: Mar 11, 2010
Threads: 79
Posts: 5890
Quote:
Quote:
CAN INDIVIDUALS IN A GROUP CHOOSE CASH AND ANNUITY?
CAN INDIVIDUALS IN A GROUP DIVIDE THEIR SHARE UNEQUALLY?

An individual lottery may have rules about how they will pay a winner (how many checks; how many winners to process, etc.) but we can handle any request to divide the prize payments. We can divide the prize however the individuals in a group wish, including requests for cash or annuity. But again, an individual lottery's rules will apply and most lotteries have not had to consider this question.


These questions came up in our group a couple years ago. I lowered the share price from $5 to $2, and a couple members asked about buying multiple (perhaps fractional) shares. While we were researching that answer, we also got into a discussion about whether to take the cash option or the annuity. I'm a strong proponent of the annuity option, especially in a fractured win like in this scenario. I think the tax savings make up for the lost time value when the prize amount falls into a certain range (large enough to be mostly in the highest bracket for the cash option, but small enough to be mostly in other brackets if annuitized).
"So as the clock ticked and the day passed, opportunity met preparation, and luck happened." - Maurice Clarett
August 11th, 2010 at 11:47:27 AM permalink
Doc
Member since: Feb 27, 2010
Threads: 27
Posts: 5110
Quote: Nareed
Quote: miplet
4 8 15 16 23 Megeball 42

I'll play it. If I win anything I won't let you know ;)

I'd be careful, Nareed. Here is what miplet posted back in the April thread on the lottery.

Quote: miplet
That's why I always choose 4 8 15 16 23 42.

I can just see the fur flying if he ever won and had to share the jackpot with you! You really have to watch out for someone who plays the "Megeball" lottery -- I feel certain that he could figure out who the scoundrel was who stole his numbers, even if you don't let him know.
August 11th, 2010 at 12:05:08 PM permalink
Nareed
Member since: Nov 11, 2009
Threads: 367
Posts: 11365
Quote: Doc
I'd be careful, Nareed. Here is what miplet posted back in the April thread on the lottery.


Yeah, well, I can't play Megeball, or Powerball, or Megaball, or any kind of ball lotto anyway.

When I played weekly, I always played the same numbers also. It's common sense.
You can visit my blog Kathy's Cooking Corner at kathyscookingcorner.blogspot.mx ... .... When someone offers you friendship with one hand and stabs you in the back with the other, you tend to notice the knife a little bit more.
August 11th, 2010 at 2:13:52 PM permalink
konceptum
Member since: Mar 25, 2010
Threads: 33
Posts: 790
Quote: Doc
Don't think that's the case at all. I think all of the major lotteries will split up a jackpot if you provide a statement signed by all of the pool members showing the share for each.

You're right Doc. Things have changed since I was ever involved in a lottery pool. But it's also important to note that your quote does state that some lotteries may not split up a jackpot. Probably a good idea to make sure an individual lottery will do a split before you enter into a pool.
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