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Nevertheless, the Mega Millions Jackpot has performed high.
The top prize is now a staggering $ 850 million – the third largest in the history of the lottery – with no tickets matching all the numbers drawn on Friday night. Then there is Powerball: its jackpot is estimated at $ 640 million for Saturday night’s drawing.
Of course, the chances of winning either game are not in your favor: the chance of a single ticket matching all six numbers is 1 in 302 million for Mega Millions and 1 in 292 million for Powerball.
Nevertheless, it is worth considering how you will handle such wind if you beat the odds.
Jackpot winners typically receive from six months to a year for the award, depending on the state where it was purchased. This generally means that it is not necessary to attend the lottery headquarters.
In other words, the winners must take a deep breath.
Big money equals big feelings
Whoever is hitting the jackpot should be prepared for a rollercoaster of emotions.
Experts say that once the initial excitement of winning the jackpot stops, their air intensity can increase.
“For someone experiencing newly created wealth … feelings of clutter and feeling overwhelmed,” said Valerie Galinskaya, a managing director and head of the Merrill Center for Family Wealth.
Of course, you don’t have to go it alone.
Given the sheer size of these jackpots, winners must assemble a team of experienced professionals – including a lawyer, CPA and financial advisor – to help them navigate the windfall.
“You want to hire the right advisors who can provide not only good advice, but advice that suits your needs and desires,” Galishinaya said.
Protect your ticket and identity
You should make a copy of your ticket, keep it in a safe place – ie, a lockbox or safe deposit in a bank – and resist the urge to share your news with everyone in your life.
“Don’t immediately inform people about this, except for your immediate and trusted family,” said Jim Shagawat, a New Jersey-based partner advisor financial planner with AdvicePeriod of Los Angeles.
Additionally, if possible, you should shield your identity when claiming a jackpot. While the standard advice is to sign on the back of the ticket, it can interfere with the remaining anonymous if state laws allow you to form a trust or limited liability corporation to claim windfall rather than do so in your name .
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If the laws of your state require your name to be publicly announced, then it is worth preparing how to respond if another person blows your air in the conversation.
“You say, ‘I’m really grateful, and we’re still working through what it means to us,” she said.
Prepare tax bill
For the $ 850 million Mega Millions jackpot, the cash option – which most winners choose instead of an annuity – is $ 628,000 million.
Before it gets to you, though, 24% – or $ 150.8 million – will be withheld for federal taxes. You can also count on Uncle Sam being too high, with incomes above $ 523,600 for individual tax filers due to the highest marginal rate of 37%, and $ 628,300 for married couples filing jointly. State taxes are also generally payable.
For Powerball’s $ 640 million jackpot, the outright option is $ 478.7 million. The 24% withholding would be approximately $ 114.9 million. And, again, there will be more reason.
One way to reduce your tax bill is to think about donations. Basically, the government gives you tax breaks if you use private money to make good use of public money.
“It’s not only about what you want to do for yourself and your family, but also philanthropically,” Galkinskaya said.
You can contribute up to 60% of your gross gross income, to a public charity or donor fund, and receive a tax deduction for the amount in the year you donate. You can also build a private base, donate income for it and then over time determine how to employ it.