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Home » What To Do If You Win the $754.6 Million Powerball Jackpot

What To Do If You Win the $754.6 Million Powerball Jackpot

08 February 2023, Wednesday
The winner of last night's $754.6 million Powerball jackpot should take some time to themselves today - sleeping in, perhaps, or quitting their job. Most importantly, however, they should be careful not to tell everybody about their massive win.

The Powerball lottery jackpot surged to an eye-popping $754.6 million this year after months of no winners. That changed on Monday night when a ticket sold in Washington matched all of the six numbers and snagged the fifth biggest Powerball jackpot in history, the ninth most significant U.S. lottery prize ever, and the first of 2020. 

Financial advisors suggest that the ticket holder may be bombarded with taxes, con artists, and relatives and friends asking for money. Hence, the initial and most indispensable piece of financial guidance is to not do certain things if you possess the victorious ticket.

Rob Burnette, a financial and investment adviser at Outlook Financial Center in Troy, Ohio, advises people to stay quiet if they are lucky enough to win the lottery. He recommends getting organized and forming a plan, considering remaining anonymous if it's an option.

The grand prize for the Powerball lottery is $754.6 million for those who select the annuity option, paid out in annual installments over 30 years. The cash option, however, is worth less at $407.2 million although it is more popular among winners. Both of these amounts are before taxes are taken into consideration. The odds of matching all six numbers are a staggering 1 in 292.2 million. The lottery is available for purchase for two dollars in 45 states, the District of Columbia, Puerto Rico and the US Virgin Islands.

Powerball has cautioned that scammers may use their names and logos to make it appear that their operations are legitimate. It is important to note that no representative from Powerball will contact you via email or social media to tell you that you won a prize unless you have actually entered an official lottery promotion or contest. Additionally, you should never accept a collect telephone call from someone claiming to be from the lottery as legitimate lotteries do not call collect.

"If you're ever asked to pay a fee to claim a prize, remember: do not send money! Chances are, you're being scammed. Powerball also warns against sharing any personal or financial information with a stranger who could be trying to wire "prize money" directly into your bank account. Additionally, never agree to cash a lottery ticket for a stranger - it's a scam."

Getting a tax attorney, tax accountant, and financial adviser is a must for anyone interested in taking home the Powerball jackpot. Working together, these professionals will be able to formulate the optimal plan. When it comes to cashing in on the prize, the jackpot winner will have two main options. An annuity option works by paying out an initial annual payment (5% bigger than the prior year's payment) followed by 29 more annual payments. Alternatively, the cash option will grant the prize winner the entire cash in the Powerball jackpot prize pool, in one lump-sum payment.

The plan should also feature a "fall guy," according to Azoury. This person or advisor is the one who ensures that loans are not given out without proper vetting and that money is not made available for projects without being tied up in investments. They would be the individual to tell people that there are no resources available to help them out and that the company has no interest in the project.

If you happen to strike it rich with a lottery win, the amount of taxes you pay may vary greatly depending on your state of residence and where you bought the ticket. As an example, if you live in California and purchase the ticket there then you will be subject to the 37% federal tax rate, but you don't have to pay state taxes. On the other hand, if you're a resident of New York, you'll face the highest tax rate on lottery winnings.

Azoury said that when a prize is claimed it should not take too long - most likely a couple of weeks. However, many people may not claim their rewards immediately and will take time to plan out their strategy. The time period for claiming prizes varies by jurisdiction and players are advised to contact the lottery in the state in which the ticket was bought to find out the applicable claim period. Specifically, Powerball claim periods usually last between 90 days and one year from the draw date.

After a lottery win with a large payout, it is important to consider where to put the money until decisions have been made with a financial advisor, tax accountant and attorney. According to Azoury, one suggestion is to put the winnings in a brokerage account. Many brokerage firms are able to spread the cash deposits across multiple banks and individual accounts can be insured up to $4 million, whilst joint accounts can be insured up to $8 million.
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