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- The next draw for the $ 470 million Mega Millions jackpot is Tuesday night and for the $ 282 million Powerball jackpot on Wednesday night.
- If you win in one or the other game, one of the big decisions to make is to choose to immediately pay cash or spread your winnings over three decades.
- You will also need to determine when and how to claim your prize, choose experienced professionals to help you manage your sudden fortune, and if you have a job, if you want to continue working.
For all Powerball and Mega Million winners, there are more than 750 million reasons not to dream of hitting the dirt.
After no one has selected all the winning numbers for the country's two biggest lotteries over the weekend, the combined total jackpot winnings are $ 752 million. The next $ 470 million draw for the Mega Millions is Tuesday night; for the jackpot of $ 282 million Powerball Wednesday night.
If you are lucky enough to win the jackpot in one or the other game, you should take a deep breath and resist the urge to talk to the world about your exciting news, experts say.
Instead, consider what suddenly becomes one of the richest people in the country. When you arrive at a money amount that changes your life, you do not just place it in a bank account and decide on the type of new car to buy or where to vacation.
"Great wealth involves great responsibility," said Certified Financial Planner Jim Shagawat, president of Windfall Wealth Advisors in Paramus, New Jersey.
Here are some key decisions to make if you discover that you hold the winning ticket of either prize.
Determine when and how to claim your winnings
No need to rush to the seat of the lottery on the day of your victory.
For the Powerball and Mega Millions, the winners have three to six months to a year to claim their prize, depending on the place of purchase of the winning ticket.
The experts recommended taking a deep breath and using all the time you need to prepare to claim your winnings.
"The time between the day you win the lottery and the day you claim is your last period of normalcy," said Jason Kurland, a partner at Rivkin Radler, a law firm based in Uniondale, New York. .
Make sure you know if you can remain anonymous when claiming your prize because laws governing lottery winnings vary from state to state.
In some places, you can easily protect your identity from the public. In other states, it is impossible. And in some states that require the winner to be announced, the law allows a trust or other corporation to claim the prize on your behalf, which keeps your name out of public view.
In addition, the usual advice is to sign the back of your winning ticket in case you are separated. However, if you end up having the option of claiming trust to protect your identity, your signature could interfere with your ability to easily follow that path. It is therefore important to first know your claim options.
Choose between a lump sum or an annuity
You must also decide to take an immediate lump sum or spread your earnings over several decades. Anyway, Uncle Sam will take 24% before it reaches you.
For the $ 470 million Mega Millions jackpot, the cash option is $ 265 million. For the $ 282 million Powerball jackpot, it is $ 161.1 million.
The 24% federal withholding tax would reduce the Mega Millions cash option by approximately $ 63.6 million, to $ 201.4 million, and that of Powerball, from 38, $ 7 million, at $ 122.4 million. You should also expect to owe more to Uncle Sam at tax time.
In addition, you will have to pay state taxes on the money unless you live where the lottery winnings are not taxed. According to the USAMega.com lottery website, the rate ranges from a high of 8.82% in New York to a low of 2.9% in North Dakota.
Many experts recommend taking the lump sum because if it is managed and invested properly, you could end up with more money over time than if you were making payments over several decades.
However, it is important to evaluate your own situation before making your choice.
"If you know that you have problems with compulsive expenses or that you know that some family members will want to spend money, you may want to opt for rent," Shagawat said.
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Choose pros to help you
Your ability to properly manage your windfall will only be as good as the advice you have given. This is why it is best to call in experienced professionals.
Before applying, you must have a team that includes a lawyer, an accountant, an insurance consultant and a financial planner. An experienced lawyer should be your first call.
"Make sure you are comfortable with every member of the team and make sure that they have the proper accreditation for their field," said Shagawat. "You need a team around you to protect yourself from abuse."
A member of the team will also serve as a goalkeeper. That is, they can respond to requests from moochers or crooks or even from friends and family members who want to take advantage of your fortune.
To continue to work
There are always stories of people who win big lotteries and leave their jobs the same day. Other winners continue to work with long-term intentions, but still end up leaving.
"For the big winners, although many want to continue working, it finally becomes impossible," Kurland said. "As winners gain new wealth, they realize all the new opportunities that are available to them."
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