Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated?
Here is a hint: If you answered yes, you probably did not bother playing the lottery. If you get the "I'm rich and don't have to pay anymore" bug, you might be dooming yourself. One lottery winner in California was strapped with debt from property purchases and what seemed to be excessive insurance policies. Whether you take the lump-sum or the annuity option, if you have a single penny of debt in the immediate future and distant future, then something is seriously wrong.
For that matter, you should not have a single debt ever again. If you manage to go broke down the road and still have a mortgage, car payments, student loans, credit card debt and personal bills, you will have lost the right to be mad when all of your friends and family members ridicule you every day for the rest of your life. If you go from living a simple life to instantly being able to spend hundreds of thousands of dollars or more per week, what do you think happens to your expectations in life ahead?
Chances are high that you will want more of the same. If you start gambling in Las Vegas and are not happy until you are gambling with hundreds of thousands of dollars or more per play, you are dooming yourself. Wait until the real con men find you. Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast. Having an entourage generally only works for people who keep making more money, and entourages have bankrupted many musicians and athletes.
Do not go out and buy dozens of cars, followed by houses and whatever else, for you and your friends and family members. This will start you on a bad path, and you could easily become the next friends and family personal welfare department.
If you start buying everything for everyone, chances are high that they might expect that to last forever. The other end of the story is that you do not have to be a cheapskate either.
Still, after hearing a real life personal story of one lucky winner buying more than 30 cars and multiple houses in three months, it is just crazy. Maybe it sounds crazy that you have to live within means when you get empire-making money. After all, most lottery winners are instantly wealthier than everyone they know combined. This also goes back to having advisors and being prudent, but at the end of the day you do still have a finite sum of money.
Chances are very high that you will make some serious purchases and your lifestyle will be changed forever. Without setting limits for yourself and for what you do with others is a recipe for disaster. Again, many lottery winners go broke. If they went broke in a very short period, what do you think the reflection about wishing for a proper budget would be?
One common theme that has come up with lottery winners and judgment winners who suddenly get vast sums of cash is that their friends and family start pitching them on endless business ideas. Sure, some will sound great and some will sound crazy. If someone has no knowledge of a particular business and does not know what it takes to actually run a business, will that person do better because a lottery winner who lucked into vast wealth provided money to start it?
If your answer is yes, you seriously need to protect yourself from yourself. This is probably not the case for most lottery players, but some people might want to give away just about all their money to a charity or to a religious institution. You can be more than generous without doing the unthinkable.
Imagine what you will feel like down the road when a serious crisis arises in your life or your family's life, knowing that you no longer had the means to change it. Should you be charitable? Should you give it all away just because a church or a charitable group does good things? Absolutely not, at least not while you are alive! Many states, such as California, Pennsylvania and Kansas require that split claims, be processed before the winning lottery prize is paid out.
Other states, such as Oregon, require one claimant to receive the payout, then file a request with the lottery commission to divide the tax liability among the other winners. In either case the lottery commission gathers information about the winners and the amount of prize each person should receive before payments are arranged.
The commission also uses claimant information to prepare the correct tax reporting information for each winner. Because each state lottery commission operates individually and may have varying rules, it is important to review the claim instructions for multi-winner claims prior to requesting a payout.
When lottery prize splits are allowed by the state and a proper claim is submitted with the claims department, the lottery commission asks you to complete IRS Form This form must contain information about all the winners and the amount of prize each person received. This form is not turned into the IRS; the lottery commission uses it to prepare a W2-G form for each winner, listing the prize each person receives.
W2-G forms are sent to winners by the end of January each year, and the IRS expects each person to report the amount of his prize as shown on the W2-G form. In general the IRS only requires you to report income that is yours. If lottery winnings you receive are split with other winners and you are the only person who receives a W2-G form, which shows the entire taxable portion of the lottery prize, the IRS expects you to report the whole prize on your return. Common Reasons Lottery Winners Lose It All They Give Too Much Away: Family, friends, friends of friends, the guy at the end of the street that lent you his edger one time—they all seem to come around more often after someone hits the lotto.
And most times, the winner shares freely. Too freely. The truly remarkable thing about these lottery winners is that the three wins came within the space of a month. If you are looking at scratch-offs as a financial investment, then it is almost certainly not worth it. You could win the jackpot on the first ticket you buy which is what makes them so attractive to play , but you could also play thousands of them and never hit the top prize. Lottery scratchers are distributed to retailers in large rolls, and each roll is guaranteed to have a certain number of winners.
Those winning scratch-off prizes will have values, some smaller, some bigger. Well, even if the grand prizes are gone, there may still be attractive prizes available to you. Buying expensive scratch cards increases your chances of winning because the price point of each ticket can be afforded by fewer players. Thus, the probability of you striking gold is much higher with expensive scratch cards than playing penny scratch-offs tickets. Begin typing your search term above and press enter to search.
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