Lottery jackpots: Things you need to consider if you win

Thursday, March 28, 2019

Each jackpot starts at $40 million, but how does it grow to hundreds of millions or more?

The odds of winning the Powerball jackpot are 1 in 292,201,338, but someone has to win eventually. That's exactly what happened on Wednesday night when someone hit the $768.4 million jackpot.

Powerball results: Winning numbers drawing yields 1 winner for $768.4M jackpot in Wisconsin

If you're convinced you can beat the odds and take home the next lottery jackpot, here are things you need to consider to enjoy your newfound fortune.

Be cautious about joining lottery pools

While lottery pools are fun to participate in with friends and coworkers, they can also be rife grounds for lawsuits and broken relationships. Make sure that your pool makes photocopies of all group tickets and distributes them to each member of the drawing. If you purchase any tickets outside of the pool, make sure your pool players know before the drawing in case you win.

Sign the back of your tickets

Every ticket you purchase should have your own signature and address. This will verify that you and only you can claim your tickets in case they get misplaced. You'll also need two forms of identification to collect your winnings.

Make a copy

After signing your ticket so only you can claim it, make photo copies of it and store them in various safe spaces.

If you win, be careful who you tell, if anyone

While you may be tempted to tell friends and family that you're now a millionaire, Alexa von Tobel, CEO of financial planning site LearnVest.com, suggests winners be discreet to avoid any personal conflicts or larger problems.

"We've seen everything from robberies to even murders of people who have won lotteries," von Tobel told ABC News. "A lot of your social dynamics around you change if people are aware of your status."

Claiming your winnings anonymously is only possible in six states: Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina. Another way to preserve your identity when claiming your winnings is by starting an LLC or non-profit to accept the money on your behalf.

You don't have to claim it right away

Don't feel like you have to rush to claim your winnings. Each state has a different deadline for claiming your prize, but all of the deadlines are at least a few months out. Instead, take the time to make a plan.

The winner of the largest Mega Millions prize seemed to take advantage of this. The winner, who claimed the money anonymously, bought the ticket in October but did not claim the prize until March.

Choose a smart and trustworthy management team

Spend a lot of time researching and assembling a smart, reliable and trustworthy financial team before you claim your winnings. Von Tobel suggests that winners find a certified financial planner, estate planner and accountant before cashing in and waiting six months or even a year before spending their winnings. The new cars and houses can wait. What can't wait is making sure that you have a strong plan before spending.

Ann-Margaret Carrozza, author of Love and Money, said you might also want to consider a psychologist to help you sort through it all.

Decide how to claim your money -- and understand you won't get it all

All prizes are subject to income taxes, which vary by state.

You can choose how you receive the money. If you choose to receive annual payments, the money you get will increase by 5 percent every year for the next three decades. If you choose the cash payout option, you receive one payment that is equal to all the cash in the prize pool.

If you know someone who may be playing the lottery irresponsibly, call 1-800-522-4700 or visit the National Council on Problem Gambling website to learn how you or a loved one can receive help.

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