Powerball $ 500 million: What to do if you win

(Moneywatch) The Powerball jackpot swelling to $ 500 million. The largest in the history of the lottery. Ticket holders across the country are mulling joint. It is nearly impossible fantasy. Daydream: What should I do if I win?

First of all. The harsh truth: the chance to win the progressive jackpot is about 1.75 millionTo put that into some perspective. The chances of lightning in your life is to hit 1 in 5000 Tim Richmond. The University of Akron mathematics professor who taught a course gambling

Of course. The jackpot has contempt chances of rolling over 16 times in a row without anyone hitting the big prizeAnd even with reduced up-front. Lump cash value of $ 327 million. Even the most jaded are tempted to purchase $ 2 ticketsThe previous largest jackpot was $ 365 million in 2006. Which won eight employees Nebraska Meatpacking Plants

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After all. If someone has to win. Why not? Earlier this year. Three lucky winners from three different states to share $ 656 million jackpot “mega millions”This award dwarfed the previous Urecord $ 390 million and now stands as the largest lottery prize ever in the world

For these winners. Sudden wealth brings a whole set of arguments about what to do with the unpredictableIf a lightning strike during Wednesday’s Powerball drawing and multi-millionaire finds himself in a moment. Here is what you need to do (which is part of my experience as a former investment adviser. Who once had a client who won the lottery):

1) Read the rules on the ticket and the lottery’s websiteYour name on the back of your card. Unless prohibited by the rules ofThen copy and SafeDo not be forced to tell the world just yetTry to refrain from telling anyone outside of your familyThis may take some time before contacting the authorities of the lottery. But be aware that periods of expiry of the tickets vary from one country to another. From 90 days to one yearThe back of your ticket detailing the likely expiration of his state

2) Assemble your team (and not a sequel. Thank you very much!) You need to interview real estate attorneys. Accountants and financial advisorsMy award-winning customer do a smart. When they approached potential professionals. They go to the interview process. To discuss their situation. But did not disclose how much they won. Until later in the sessionThat way they can tell if a counselor treats all his clients with respect or richImportant note: Do not just hire a manager of moneyYou can collect anywhere from 3-6 different areas of expertise

3) Determine whether you will receive a lump sum payment or in installmentsAt this point. The lump sum for the prize of $ 500 million is $ 327 million before federal taxes and $ 245 apply2 million after taxInstead. You can choose to receive annual payments over 29 years. Which would amount to $ 166 million per year before taxes and $ 125000000 after taxThis does not include state and city taxes. Which will reduce your TakeYou have 60 days. After claiming their ticket. To make the decision

You hear most of the winners will take a lump sum because they want to control the total amountThis year it could be a control edge under the lump sum. Because the chances are good that the tax increase next year

The big problem with the lump sum is that winners often end up blowing the entire amount doing stupid thingsDon McNay. Author of “Son of a Son of a Gambler: Winners. Losers and what to do when you win the lottery.” says nine out of 10 winners go through their money in five years or less”It’s very fast. Very high,” he says”Putting the brakes on the condition that none of them is about

The stream of income guarantees that you do not blow through your entire Jackpot (which is why I’m a big fan of annuitization)That said. There’s a big caveat to go this way – if you die before collecting the full amount of your winnings others may or may not pass on to their heirsIf you won the lottery rules and state depends on the individual

4) Determine the legal structure of investment holdingsYour attorney will help you determine whether you should use trusts. Limited liability corporations or evenDepending on your country of residence may each have advantages and disadvantages in relation to taxation. As well as privacy

Speaking of privacy. Your secret will soon be out and you might be surprised by what you smell around looking for “help” or offer your “investment opportunities favylous”I advised my clients to provide for their children and to say” no “to all the other until a budget is in place for your new wealthThere will be ample opportunity to show your generosity down the road. So it is wise to keep money under lock for at least one year

That said. It’s good to splurge a littleThe most important thing is to go crazy – at first. Keep it less than $ 100.000This means that you do not buy a new house or a Ferrari for some time. But do not take your family on a fabulous vacationWhen you come back. Remember that you have a new job: your money management responsibilities

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