If you've ever bought a lottery ticket, you've probably fantasized about what you'd do the minute you got that multimillion-dollar check.
That fantasy probably didn't include visiting a lawyer's office, but it's one of the first things you should probably actually do if you do become one of the fortunate few who actually wins.
That way an attorney can help you set up a lottery trust -- which may be the only way to hang on to that wealth and avoid adding your name to the "cursed" list of winners.
Here's the reality: Unless you already had a lot of money, you aren't used to handling all that money. You don't know how to preserve it, grow it or keep it safe from people who simply want to manipulate you out of it. A trust can do all three -- making sure that you have plenty of money decades after the thrilling moment is over.
A lottery trust generally has to be established prior to claiming your winnings, so consider these benefits of having one established carefully:
- You may need it to make certain all legal requirements are kept if you bought the ticket with "pooled" money, whether it was your office pool or your neighborhood pool.
- You can remain anonymous -- which may be beneficial if you want to hand out money to some friends and relatives but not all of them and don't feel like ending up in the middle of an emotional tug-of-war over the issue.
- You can let the trust handle the taxes -- which can trip up winners very easily, especially if they chose multiple payments over their lifetime.
- You can let the trustee invest the money so that it continues to produce an income for you over the years, instead of just being spent down to nothing.
There are, naturally, several types of trusts that can be used to effectively manage lottery winnings -- but you want to discuss the particulars with your attorney so that your short-term and long-term goals are met.
Talk to an attorney today to learn more about trusts and how they can be useful to you.
Source: FindLaw, "Lottery Trusts," accessed Sep. 15, 2017