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Lump Sum Lottery Winnings

Updated on March 14, 2014

You Won the Lottery, Now What?

Many people fantasize about what they would do if they won the lottery. Buying homes, cars, taking vacations, taking care of family members, and quitting jobs are among the first things people say that they will do if they ever strike it rich. But, what about seeing an accountant first? Not first on most lists, yet an advisable thing to do according to financial experts.

Expert Advice

Before rushing off to collect your winnings, take a week or longer to get your support persons in place. You will also probably want to use this time to get some advice from an accountant. Your life has just changed, take a moment to let the euphoria wear off before making plans for spending all that money.

Think rationally, don't run out and quit your job, or brag to all of your friends, wait until you actually have the money in your hands. You will also need your own personal financial team of experts you can trust. The team should consist of one of each of the following: an accountant, financial adviser and a lawyer. Never use just one person for all of your financial needs. It's best to avoid using close friends or family in the profession.

Payments or Lump Sum?

If you really can't control your spending, or perhaps get carried away gambling, payments may the best way for you to go. The majority of winner will choose to take their winnings in one lump sum. The lump sum will be less than the amount of the total payments, yet, if invested wisely, it can turn into a lot more.

Prior to collecting your winnings, set up a special bank account, a regular checking or savings account can't take a million dollar check for deposit. A pre-arrangement with an account that can accept wire transfers is probably what your financial team will suggest.

One last thing that you will want to do immediately is to change your phone number and get an unlisted one. The endless barrage of calls will begin as soon as you are announced the winner.

Go Get Your Money!

Collecting Your Winnings

If you have hit it big and are about to become extremely rich, arrive to lottery headquarters in style, any way you want! Be sure you have your ticket securely in place for the trip, also, don't forget any deadlines. All lotteries have a set deadline from the time of the drawing that winners have to collect their winnings.

Remember that your winnings will be less than expected if you opt for taking your winnings in one lump sum. Right off the top the government is going to get their cut for taxes, a 28% cut! A word of warning for those who are delinquent on taxes or child support, the law will find you and collect on these things as well.

If you plan on keeping your sudden wealth a secret, that's not going to happen. Once a lottery winner is declared it is required by law to be released as public information. Your name and hometown will become public information.

 

Conclusion

Most experts do advise to take a lump sum rather than payments, just know how to invest your winnings wisely. A financial team is a must, so choose them wisely. Spend and invest your money wisely and you and your loved ones can enjoy a nice future.

What if You Won the Lottery?

Which money option would you choose, payments or a lump sum?

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