Mega Millions

In that the annuity passes to heirs, correct? if the lotto winner is elderly, that's not such a bad idea.

I mean at a certain point, how much better can you eat, what could you buy that you can't already afford?

Quote: Dieter

Those maladaptations to sudden life changes are another reason I suggest the annuity payout.
Yeah, you might be hard up for 11 months after stocking up on fish eggs and flashy cars, but you can sort it back out again next year after learning your lesson.
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It’s a nice thought. But it’s not that hard to take a loan out against an annuity. And a degen is gonna degen.

How do users make their own threads?

Quote: 100xOdds

i bought 2 tickets.
the 2nd ticket halves my odds.

So it's 50/50 chance now.
I either win or I don't.
(Common core math...)
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hm.. near infinity/2 is still near infinity?

what say you Mathletes?

Quote: tuttigym

Moving on. Two practical questions:

1. Where does one deposit $600m for future use?
2. How does one INSURE $600m while determining how to disperse funds for whatever?

tuttigym
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Placeholder--I'll be back with a real reply after I BBQ and eat a fantastic steak.
I'll try to hold down the 'wall of text'—no guarantees.

First, stories. My late brother knew someone who won a smallish lottery, about 15 million. The winner went down to State Lottery Central and got his pic taken with one of those fake checks. Dumbest move ever.

Two days later, he pulls into his driveway. He's already had to change his landline number (this was about 15 years ago), and his mailbox is filled with begging letters. He can't get in his small suburban driveway because it's blocked...by a gurney! There's some young person under a blanket, bottles of fluids leading to tubes snaking under the covers, and an earnest parent pleading for some money so that Little Bunchkin can get an operation. He had to call the cops to clear them out. After a few months, he had to move. It took a couple of years for him to be able to sell the house, since folks camped out on his doorstep, even though the house was clearly empty, hoping he'd come by.

Then there's the murder angle: I googled "Lottery murder" and got a lot of murder stories about people that won the lottery. These aren't the $200 million winners either. One poor guy won just $1mil and got lead for dessert. There's other bad results of going public: kidnappings, blackmail, malicious prosecution, people filing phony claims on you. I am so lucky I live in a state where, should I ever be tempted to play the lottery and against all odds, win, I can claim the prize anonymously.

But what if you're not in such an enlightened jurisdiction? Here's some tips I read somewhere once, and would research again using "sudden wealth" as a search term: First, set up (with a lawyer) a nested series of LLCs, one of which actually claims the prize, the next is the sole beneficiary of the first. The only name on the LLCs is a law firm, and they don't say nuffin to nobody. Once the money is safe in the second LLC, you dissolve the first, and the only people that know are the IRS & state level tax folks and Secretary of your State (or whoever registers LLCs).

Frankly, I'd just as soon hire the lawyer right out from under the law firm, have him set up his own biz, and pay him a nice fat retainer. Same with my stock brokers. I mean, really, when you win a third of a billion, you're suddenly a small business whether you want to be or not.

Funny—most of this is right out of my head, and then I go read the Sudden Wealth article in Investopedia, and they're saying the same thing I am. Spooky.

Lastly, I tell nobody. We're celebrating our <high number> anniversary this year, so I do think I can trust the better half. Also, maybe the kids. Maybe not. In any case, the siblings of both of us are going to be kept in the dark. They'll get money, but as the beneficiary of a trust held by, you guessed it, a separate LLC created just to give the money away. Oh, and charity? I'm thinking that the same LLC will be a kind of variant of the crowdsourcing funders, but I get to make the funding decisions and a PR firm is the public face of the charitable operation.

Anyway, that's how I'd handle lottery winnings if I ever played it and won.

Quote: BillHasRetired

Quote: tuttigym

Moving on. Two practical questions:

1. Where does one deposit $600m for future use?
2. How does one INSURE $600m while determining how to disperse funds for whatever?

tuttigym
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Placeholder--I'll be back with a real reply after I BBQ and eat a fantastic steak.
link to original post

Now I'm in the mood for steak with chunky BBQ sauce

Quote: dieter

1. It goes to the trust, if I can swing it.
2. It goes to the trust, if I can swing it.
3. If my life goals exceed $50k/day, I think that's nature's way of telling me to dial it back a notch.
4. Why would I want the lump sum in the trust, exposed to malfeasance and shrink, instead of receiving 30 years of income? I know that any financial manager I hire is going to be sneakier and sharper than I am, or I wouldn't have hired her.
5. DieterCo seeks infamy, not fame.

I believe you might have some misconceptions of what a trust is, can do, and/or how an individual trust owner can control the assets. However, that is probably for a separate thread, so rather than get into some hijacking or deep analysis, I will defer.

tuttigym

I’m single with no dependents. If I won I would like to hang out with MDAWG and enjoy what the Vegas Casinos has to offer for a AP Whale.

Quote: NewWorldOrder

How do users make their own threads?
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Welcome to the forum.

New members have some limitations during the initial probationary period. There are many thread topics; please try the search function to see if your question aligns with an existing thread.

Until probation elapses, PM a moderator; we may be able to help.
gordonm888
OnceDear
Dieter

Quote: unJon

Quote: Dieter

Those maladaptations to sudden life changes are another reason I suggest the annuity payout.
Yeah, you might be hard up for 11 months after stocking up on fish eggs and flashy cars, but you can sort it back out again next year after learning your lesson.
link to original post

It’s a nice thought. But it’s not that hard to take a loan out against an annuity. And a degen is gonna degen.
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One hopes that the "Oh, I done goofed" kicks in before they call up the structured payment buyout plan folks for the fourth time this month.

Was just reading a story (but didn’t link it from Daily Beast) about the misfortunes of many lottery winners, Several said they wished they never bought the ticket. What I note, is they should have avoided telling anyone they didn’t have to. That looks more like the lesson one should learn.

Quote: rxwine

Was just reading a story (but didn’t link it from Daily Beast) about the misfortunes of many lottery winners, Several said they wished they never bought the ticket. What I note, is they should have avoided telling anyone they didn’t have to. That looks more like the lesson one should learn.
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Many states require you to disclose your name.

Change your name to something generic before you claim. You can change it back afterwards. I think it's completely legal, since you're not trying to avoid debt or warrants. I have experience with legal name changes, clearly I wasn't born Michael Bluejay.

Quote: MichaelBluejay

Change your name to something generic before you claim. You can change it back afterwards. I think it's completely legal, since you're not trying to avoid debt or warrants. I have experience with legal name changes, clearly I wasn't born Michael Bluejay.
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I have thought about that also. How long does it take to do a legal name change? I had no idea Michael Bluejay was not your given name.

Who gives a damn, if they require a name so I can claim a Billion dollars so be it. I would jut get a new phone number and be off social media for a long time or go by another handle. It’s a nice problem to have, I wouldn’t mind it at all.

My updated Comprehensive Lottery Report:

https://wizardofodds.com/online_gambling/articles/the-lottery-still-sucks/

Which, unfortunately, is missing a few states who haven't put out a new report since FY2019 or FY2020, which I avoided (and is why I waited until now) to avoid potential influence on the numbers from Covid.

If you live in a state where your name must be public if you win.just contact a lawyer and create a trust, Name the lawyer as trustee, and you and whomever else shares in your new found wealth as beneficiaries and put the ticket in in the name of the trust. The only thing public is the name of the trust - which can be anything you want - and the trustee. That's a way to protect anonymity, while meeting requirements for public disclosure.

If I win a big jackpot, that's what I would do. And I would never ever again speak to another human being unless I wanted to

Gene

Quote: GenoDRPh

If you live in a state where your name must be public if you win.just contact a lawyer and create a trust, Name the lawyer as trustee, and you and whomever else shares in your new found wealth as beneficiaries and put the ticket in in the name of the trust. The only thing public is the name of the trust - which can be anything you want - and the trustee. That's a way to protect anonymity, while meeting requirements for public disclosure.

If I win a big jackpot, that's what I would do. And I would never ever again speak to another human being unless I wanted to

Gene
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i can buy lotto in my state or in my job's state.
in the other state, i dont have to disclose my identity but there's a +3% lotto tax.
(state tax is the same in both states)

$1B after cash prize and taxes = $400M
3% of $400M is $12M

i'd rather buy in my state, save the $12M and do what you suggest.

Downside of what you suggest: Lawyer might run off with the winning ticket

You keep the winning ticket in your possession until it's time to present at the lottery commission. When the lawyer opens the checking account for the trust, you make it so it requires both your signature and his/hers to write checks. There are lawyers who specialize in lottery trusts, and are tempted with large winnings and still act honorably.

Gene

From the IRS perspective, you would personally be the winner and responsible for the taxes and then you made a gift of the winnings to the trust. Is that right? I thought that was the IRS view unless the ticket is contributed to the trust before the time of the drawing.

Quote: unJon

From the IRS perspective, you would personally be the winner and responsible for the taxes and then you made a gift of the winnings to the trust. Is that right? I thought that was the IRS view unless the ticket is contributed to the trust before the time of the drawing.
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Other way around, as far as I know. Claiming the money yourself and then creating a trust defeats the purpose of using the trust to be anonymous.

I am not a lawyer, but I did ask this question once of a lawyer knowledgeable in financial matters. From what he told me is that the lawyer sets up the trust and claims the winnings in the name of the trust, So, by then you would have given the ticket to the trust and made the ticket trust property. He then claims the money from the lottery minus whatever withholding for taxes, deposits the check and then gives you access to the money, or writes you a check for the proceeds, according to the trust. You as the beneficiary don't pay taxes on the monies you get from the trust, but the trust must pay taxes on the monies it gets from the lottery. The lottery office gives the lawyer/trustee the 1099, with the trust's name on top, not yours. As far as the IRS and the state tax collectors are concerned, the trust is on the hook for the taxes and not the beneficiaries. Note that issues like child support, alimony or back taxes owed the by beneficiary can complicate payouts.

As for when the ticket has to be given to the trust, many winners create the trust after winning and give the ticket to the trust after winning, but before claiming. If there is an IRS rule that the ticket must be trust property before the drawing, no person that I can find ostensibly knowledgeable in such matters is aware of it.

It is my hope that one day, perhaps soon, I put my information to the test....

Gene

Thank you for the response. I am aware of court cases (outside of tax law) that hold that a winning lotto ticket is worth the purchase price until the drawing and the winning amount after the drawing. So it surprises me to hear that if the ticket is given to the trust after the drawing, that there are not tax ramifications to the owner of the ticket. But I have not researched it so will leave the issue.

A winning lottery ticket is a bearer instrument-says so right on the back, As far as anyone knows or cares about, the "owner" and therefore the person or entity that owns the ticket, gets to reap the windfall and has the tax liability, is the bearer who signs the back and presents it for redemption. There was a case about 30 years ago where a notorious gangster claimed lottery winnings here, Made big news at the time. I can relay the story if you'd like.

Gene

For those of us that have a trust, and have most of our bank accounts in the trust, I wonder if using money from one of those accounts to purchase the ticket would alleviate the potential problem?

Quote: GenoDRPh

You keep the winning ticket in your possession until it's time to present at the lottery commission. When the lawyer opens the checking account for the trust, you make it so it requires both your signature and his/hers to write checks. There are lawyers who specialize in lottery trusts, and are tempted with large winnings and still act honorably.

Gene
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1) How do i find lotto lawyers in my state?

2) double signature: I guess the 1st check is a big check ($1M+) written to you so that you dont have to go through the lawyer that often?

3) Also, it's been recommended that if you win lotto to sign the back of the lotto ticket immediately after winning.
if you go the trust route, then you hold off signing the back the ticket till after you see your lawyer and the trust created?

and what do you put down in the back of the ticket if the Trust is claiming it?

I play. But not for entertainment, nor for any delusion of the odds.

Has it been discussed that gambling is not just about entertainment but about hope. Having non-zero hope in the form of a $2 lottery ticket is infinitely better than having no hope at all that you will be more than destitute.

The lottery fills that need unlike any other form of gambling. No need to dream of riches and luxury, just hope that you may one day afford something simple like healthcare-related or an end to dental pain or not be a burden on others.

For those who say that one chance in 200 million is essentially zero, consider that every single one of us overcame comparable odds when coming into existence - the sperm that fertilized the egg to become us was one of about 200 million and ALL the rest died. Thus each of us is incredibly lucky. We're proof those odds can be beat.

Quote: DRich

For those of us that have a trust, and have most of our bank accounts in the trust, I wonder if using money from one of those accounts to purchase the ticket would alleviate the potential problem?
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I suppose you can use trust money to buy lottery tickets in the trust's name, if the trust allows the money to be used that way, or at least doesn't disallow it. But, again, neither the IRS nor state tax officials nor state lottery officials care if a winning ticket is donated to the trust after winning, but before claiming. Happens all the time, Is anyone aware of any case where a purchaser is on the hook for taxes even though the ticket was claimed by a trust?

Gene

Here’s a relevant decision. Judge definitely has a sense of humor. Different facts then under discussion here, but one relevant takeaway is that the tax court definitely did NOT conclude that the corporation that claimed the ticket was the ticket owner, rather it was the woman that had the winning ticket then gifted it to the corporation, thereby incurring lots of gift tax liability. (The gift tax was because her family members had % equity in the corporation.)

https://www.taxnotes.com/research/federal/court-documents/court-opinions-and-orders/transfer-of-lottery-winnings-to-s-corporation-was-taxable-gift/1prx3


At any rate, talk to a professional tax attorney to make sure any trust you set up doesn’t leave you with a similar liability.

Some further googling indicates that the IRS will challenge allegations that coworkers or others pre agreed to split winnings, unless there is sufficient evidence before the drawing.

Fun 15 min Internet rabbithole.

Quote: 100xOdds

Quote: GenoDRPh

You keep the winning ticket in your possession until it's time to present at the lottery commission. When the lawyer opens the checking account for the trust, you make it so it requires both your signature and his/hers to write checks. There are lawyers who specialize in lottery trusts, and are tempted with large winnings and still act honorably.

Gene
link to original post

1) How do i find lotto lawyers in my state?

2) double signature: I guess the 1st check is a big check ($1M+) written to you so that you dont have to go through the lawyer that often?

3) Also, it's been recommended that if you win lotto to sign the back of the lotto ticket immediately after winning.
if you go the trust route, then you hold off signing the back the ticket till after you see your lawyer and the trust created?

and what do you put down in the back of the ticket if the Trust is claiming it?
link to original post

I am not a lawyer, but have spent a certain amount of time over the years thinking about and researching this, so maybe-or maybe not-my answers are valid. Or I could just be slinging the bull. But, in the name of good fun, and as a pleasant diversion to discuss other than some knucklehead who wins roulette 80% of the time, here goes.

(1) MA is not a large state, and lawyers who specialize in such things are widely known to the public, or to other lawyers in professional circles. Any GOOD lawyer would, at least, be able to prepare the documents for you, or be able to quickly refer you to someone who can. In your state, your mileage may vary. But, make sure you use a lawyer that will only charge his regular hourly rate for his services, and not for a portion of the winnings. That's how you tell a good lawyer from bad one.

(2) Other way around, you WANT to go through the lawyer for the first initial steps. The first big check is written to the winner of the ticket, who is the person who signed the back of the ticket. If "John Smith" signed the ticket, then "John Smith" gets the big check. And his name in the evening news. You want to avoid that. If "John Doe, Trustee for the ABC Lottery Trust" signed the ticket, then the lottery will put "ABC Trust" as the payee. And John Doe, lawyer, will get his name in the papers as trustee of the trust. Then John Doe will deposit the check, and then write one or more checks to the anonymous beneficiaries of the trust. This point cannot be overstated: whoever is the payee of the check is the name that gets released to the public. You want to avoid that at all legal costs.

(3) Some lawyers advise to not sign the back of a winning ticket until a trust is created, so the only signature is the trustee of the trust and the trust's name. Other lawyers say it's okay to sign the back of the ticket, but in small writing so as to add certain information afterwards, if you go the trust route. I guess it all depends on your level of comfort with your level of risk of loss or theft. My current domestic situation has a very low risk or theft of a winning ticket, Your situation may be different, so you may want to sign the back immediately, and follow the lawyer's instructions afterwards. But, let's assume I bought a ticket, signed the back with my true, legal name and then win a mega prize. I'd most likely add to the back "Beneficiary" and my lawyer would write on the back his name and the trusts name, so it might read like, in total " Eugene Benedetto, Beneficiary. Albert DeSalvo, Trustee, Officially Retired Trust". No, Benedetto is not my last name, and extra credit if someone can discover who Albert Desalvo really was around these parts. If I didn't sign the ticket yet won a big prize, I'd imagine the lawyer would create the trust, naming himself as trustee and me as beneficiary, and then I'd hand the ticket to him and watch him sign it "Albert Desalvo, trustee Officially Retired Trust".

Most likely never ever going to happen in my lifetime, but as Sam Spade and Carly Simon said, that's the stuff dreams are made of.

Gene

Based on what is posted here on the forum to insure one's anominity:
1. Go to Vegas and create a $1 million line of credit.
2. Pick a "handle" on a public forum like a graduate from the Univ. of Arkansas (razorbacks/hogs) like Dhawg.
3. Spend endless days at private tables wagering huge amounts of money and boasting of large wins, comps, expensive foods, watches, etc. on the public forum stressing that no one is to out you for this behavior or "Adventure."
Your secret identity will be safe.

Result: Complete Secrecy

tuttigym