Whether you bought a ticket yourself or got some as a stocking stuffer, could that $1.15 billion Mega Millions jackpot have your name on it? The odds may be against you − like 1 in 302.6 million − but that doesn’t mean you can’t prepare.
If there is a winner, Mega Millions jackpot would be the fifth-largest jackpot in Mega Millions history, making the take-home prize a lump-sum payment of an estimated $516.1 million after taxes. How do you even begin to get ready for a windfall like that?
The “smartest thing” you can do, in the event that you do win, is keep calm and carry on, financial advisers shared with USA TODAY back in March. And avoid posting any and all details of your win on social media.
“If you’re lucky enough to win the lottery, keep it quiet,” Rob Burnette, an Ohio-based financial adviser at Outlook Financial Center. “Get organized and make a plan. Consider staying anonymous, if it’s a possibility.”
If you find yourself in a situation where you stand to inherit millions of dollars, the best people to get in touch with financial experts right off the bat so scammers don’t get the chance to bleed you dry before you even get the chance to cash in.
“Crooks usually try to get you to wire money for ‘taxes’ or ‘fees,’ or may try to get you to provide them with a bank account number, which they will then clean out,” Mega Millions said. “No real lottery tells winners to put up their own money in order to collect a prize they have already won.”
No Mega Millions representative would ever call, text, or e-mail anyone about winning a prize so be especially wary of who contact you out of the blue. In certain states, you can remain anonymous if you win.
Steve Azoury, owner of Azoury Financial in Troy, Michigan, who has advised many lottery winners, including a $181 million winner “who said ‘If I didn’t know you before, I don’t want to know you now.’”
“Get a tax attorney and a tax accountant right off the bat and then a financial adviser,” according to Azoury. “They’ll work hand in hand to figure out the plan.”
The “plan” will help you get some things squared away, such as whether you will opt to take an immediate cash payout, or if you’d prefer the cash distributed over time.
The difference between the two is outlined below:
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An annuity option makes an initial annual payment followed by 29 annual payments. Each payment is 5% larger than the previous one.
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The cash option is a one-time, lump-sum payment equal to all the cash in the jackpot prize pool. At Tuesday’s drawing, it’s $413.5 million.
The decision, though, will likely depend on your goals, your age, and what lottery rules are for beneficiaries to continue receiving payments, or if you’d likely squander a lump sum. The size of the lottery winning as well as your current and projected earnings are some things to consider, according to Mark Steber, chief tax officer at Jackson Hewitt.
Get expert advice: How do I find a financial advisor? These top firms can help with financial planning.
Your financial expert, or experts can also help you find a “fall guy,” a person or adviser “who keeps you from giving loans to anybody, who tells people all the money’s tied up in investments, not available,” Azoury said. “We have nothing available to help you out, and we’re not interested in your project.”
Only you and your financial adviser, or advisers can help you figure out the best way to protect you and your money.
Most people won’t claim their prize right away, taking some time to figure out a plan that’s right for them. Mega Millions claim periods, which ranges from 90 days to one year from the drawing date, varies from state to state.
“Winning tickets must be redeemed in the state in which they were purchased, but lotteries typically have a claim-by-mail option for most prize levels,” Mega Millions said.
But it might be in your best interest to “park” the earnings until you are able to hire and meet with a financial adviser, tax accountant and attorney that’s right for you.
“One suggestion would be putting your winnings in a brokerage account, as many brokerage firms can spread the cash deposits across multiple banks,” according to Azoury. “Within one brokerage account, up to $4 million can be insured, if single, and up to $8 million can be insured on a joint account.”
The exact amount you stand to net will vary, depending on the state you win the Mega Millions jackpot in. Lottery-related regulations and laws are different from state to state. While there is no hard and fast timeframe for the claimed prize to make its way to you, it shouldn’t take more than a “couple of weeks,” Azoury said.
You’ll likely be propelled into the highest federal tax bracket, if you win the lottery. The state where you live and the place where you bought the winning ticket can greatly impact what you pay in taxes and how many, if any other states you will have to file taxes in.
California is one a dozen states, including Alaska, Delaware, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, that does not tax lottery winnings.
“This is where a tax professional really comes in handy,” Steber says. “State taxes can be very tricky.
The next drawing, where the winning numbers for the $1.15 billion jackpot will be determined, is Friday, Dec. 27 at 11 p.m. ET. Mega Millions drawings take place every Tuesday and Friday at 11 p.m. ET. Tickets are available up to 15 minutes before the drawing takes place.
In order to win the jackpot, you must match all six winning numbers in a drawing. That being said, players may pick up to six numbers from two separate number pools.
Five of the numbers will come from white balls whose numbers range between 1 to 70 and the last number will come from the gold Mega Ball whose numbers range between 1 and 25. Players may also select the “Easy Pick” or “Quick Pick” options, which will have the computer randomly generate six-number sequence.
The “Megaplier,” a $1 add-on feature, that can increase non-jackpot prizes by 2, 3, 4 or 5 times. Before each regular Mega Millions drawing, the Megaplier is drawn. From a pool of 15 balls, six are marked with “3X,” five are marked with “2X,” three with “4X” and one with “5X.”
Lottery tickets can be found and purchased from local convenience stores, gas stations, grocery stores or purchased online − in a handful of states. Some airport terminals may even sell lottery tickets, too.
You can also order tickets online through Jackpocket, the official digital lottery courier of the USA TODAY Network, in these U.S. states and territories: Arizona, Arkansas, Colorado, Idaho, Maine, Massachusetts, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Puerto Rico, Texas, Washington, D.C., and West Virginia. The Jackpocket app allows you to pick your lottery game and numbers, place your order, see your ticket and collect your winnings all using your phone or home computer.
Jackpocket is the official digital lottery courier of the USA TODAY Network. Gannett may earn revenue for audience referrals to Jackpocket services. Must be 18+, 21+ in AZ and 19+ in NE. Not affiliated with any State Lottery. Gambling Problem? Call 1-877-8-HOPE-NY or text HOPENY (467369) (NY); 1-800-327-5050 (MA); 1-877-MYLIMIT (OR); 1-800-981-0023 (PR); 1-800-GAMBLER (all others). Visit jackpocket.com/tos for full terms.
Contributing: Emily DeLetter and Fernando Cervantes; USA TODAY
This article originally appeared on USA TODAY: ‘If you’re lucky enough:’ How to handle ‘Mega Millions’ level riches
