GAMBLERS who win the Powerball or Mega Millions jackpot should take a series of steps before going public, a lotto expert has said.
Jared James, a lotto algorithm founder, stressed the importance of a winner building a team of different advisers, rather than relying on a single person to navigate their newfound wealth.
Jared James, the founder of Lotto Edge, has shared steps players can take so they can protect their winningsJared James Rosemary Casarotti was unmasked as a $1.2 billion Mega Millions winner earlier this monthGettyAnd, if a winner fails to insulate themselves, they could run into trouble later down the line, according to the lotto expert.
Earlier this month, Rosemary Casarotti entered the history books when she became the largest Mega Millions winner in California history after claiming her $1.2 billion prize.
After facing a conundrum over how to receive her prize, she selected the lump sum option and this meant the total was cut to $571 million.
It’s estimated that 90% of lottery winners take the lump sum, but James, the mastermind behind the lottery algorithm site Lotto Edge, urged winners not to rush before coming forward.
He emphasized the importance of building a team, sharing five tips for winners.
James recommended that winners hire an attorney and revealed the characteristics they should look out for.
“You need a competent attorney on your side that’s going to help set up how to create that installation for you,” he said.
“Just because your best friend knows an attorney doesn’t make them qualified to help you in that situation.
“You’re looking for someone that’s not necessarily experienced in lottery winnings, but someone who has dealt with high wealth or situations like that.
James also recommended players to hire a financial adviser and said this shouldn’t be the same person.
“With one person, you’ve now put all your eggs in one basket and you’re assuming they have your best interest.
“Having multiple advisers can help give a gut check. It gives you a bigger sounding board and that’s really what you need because you’re in a unique situation.”
“It’s really difficult to have this large lump sum of money, it’s not easy to deploy it and put it to use right away,” he added.
“You’re going to be tempted to invest it in that restaurant idea your cousin has, for example, and I think it leads to unwise decisions.
He also advised against hiring the first financial adviser they stumble across on the web.
“Really seek out and interview multiple ones and see which are best for you,” he said.
“Some are better communicators while some have experience. You really need to weigh which situation is best for you.”
James also urged players not to boast about their winnings on social media, and to begin preparing family members.
He explained that a winner’s life is going to change just because of the amount of money they’ve won.
“There’s no reason to be flaunting this,” he warned.
“I would keep quiet and just use that time to get things set up.
“The house you live in, the neighborhood, your friend, everything is going to change so you need to be prepared for that.”
With one person, you’ve now put all your eggs in one basket
Jared Jamesfounder of Lotto EdgeWinners should also confide in their close family and explain to them that their situation will change.
And, he warned that families who have young children might be affected in different ways.
James explained how a young child may be a topic of conversation among other similarly aged students if their parents have won a large amount of money.
“That’s something they’re going to have to deal with,” he said.
“You kind of overlook [the point] on how it may impact them.”
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
Some states allow winners to remain anonymous, but James warned in states, like California, where a jackpot winner’s name is made public then they might have to consider moving to a different location.
More than a dozen states allow players to claim prizes anonymously, but there are caveats.
States such as Kansas and Maryland allow players who win any prize to keep their identity under wraps.
Some states have imposed thresholds. In Arizona, a player can only stay anonymous if they win more than $100,000.
In Texas, the threshold is $1 million, as is the case in West Virginia.
But, in Arkansas, winners can only stay anonymous for three years.
Their name will be disclosed once the anonymity window elapses.
In California, a lotto winner’s name is released, but they can choose to keep other information under wraps.
While Casarotti was unmasked, little is known about her.
The ticket she emerged victorious on was bought from a Sunshine Food and Gas Circle K store in Cottonwood.
She told lotto officials that she wanted to remain as anonymous as possible.
Remember to gamble responsiblyA responsible gambler is someone who:
Establishes time and monetary limits before playing Only gambles with money they can afford to lose Never chase their losses Doesn’t gamble if they’re upset, angry, or depressedIf you or someone you know is struggling with gambling addiction, call the National Gambling Helpline at 1-800-522-4700 or visit the National Council on Problem Gambling online.
GettyCasarotti was unmasked weeks after she hit the jackpot (stock)[/caption] Read More Details
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