Mega Millions: What To Do if You Win
The latest Mega Millions jackpot is projected to be a half a billion dollars. What are the right things to do if some lucky ticket buyer in Yakima hits it big? $500M is a lot of money. You could bail out the City of Yakima from its budget woes by writing a check, and still have nearly half a billion dollars left. What would you do first if you won?
Some experts have some tips for you on what do if you hit it big:
Q: What do I do with the ticket?
A: Before anything else, sign the back of the ticket. That will stop anyone else from claiming your riches if you happen drop it while you’re jumping up and down.
Q: What next?
A: Relax; breathe; take time to think about your next move. Don’t do anything you’ll regret for the next 30 years.
Q: So whom should I tell first?
A: Contacting a lawyer and a financial planner would be a lot wiser than updating your Facebook status. Make sure it’s someone you can trust and, it’s hoped, dealt with before.
Q: Remind me, how much did I win?
A: As it stands now, the Mega Millions will pay out a lump sum of $359 million before taxes. The annual payments over 26 years will amount to just over $19 million before taxes.
Q: How much will I pay in taxes?
A: Federal tax is 25 percent; and Washington State has no income tax. So count on about a quarter of your winnings going to the government.
Q: Should I take the cash payout or annual payments?
A: This is the big question, and most people think taking the lump sum is the smart move. That’s not always the case. First, spreading the payments out protects you from becoming the latest lottery winner who’s lost all their money. It would definitely slow down your spending a little.
Q: But what if I’m good at managing the money?
A: Invested properly, the lump sum option can be a good choice. There’s more planning that you can use to reduce estate taxes and other financial incentives. Others, though, say that with annual payments, you are taxed on the money only as it comes in, so that will put you in a lower tax bracket rather than taking a big hit on getting a lump sum.
Q: Should I try to shield my identity?
A: Absolutely. This will protect you from people who want you to invest in their business scheme or those who need cash in an emergency. Lottery winners are besieged by dozens of people and charities looking for help.
Q: So how can I protect myself?
A: In Washington, you can form a trust to manage the money and keep your winnings a secret, but still be discovered through public records. Washington doesn’t require you to show up and receive your oversized check in front of a bunch of cameras, making it impossible to stay anonymous. Arlen Harris with the the Washington Lottery says that last year Jim and Carolyn McCullar of Ephrata split $380 million with a Post Falls woman, collected their winnings and now basically have “fallen off the end of the earth”, moving and changing all of their contact information to protect their privacy.
Q: Is it OK to splurge a little?
A: Sure, it’s why you bought a ticket, right? Get it out of your system, but don’t go overboard. But remember that if there’s a new Mercedes-Benz in the driveway, your neighbors will probably be able to figure out who won the jackpot.
A lot to consider if you were to hit that one in 176 million chance of winning.