What Happens When You Win Powerball?
If you win the Powerball jackpot there are a number of important steps to follow. You will be guided through the process by lottery officials, but the first thing you need to do is claim your prize and have your ticket validated. You may be required to attend a press conference and will have to decide whether to accept your money as an annuity or a one-off cash payment. Read here all about what happens when you win Powerball.
How Long To Claim?
If you win a Powerball jackpot, it is important to know the length of time you have to claim a prize. This varies from state to state, ranging from 90 days in New Mexico to a year in several states. Visit the How to Claim page to view a full list of the participating jurisdictions and the claim period for each one. Any Powerball prize must be claimed in the state in which you bought your ticket.
Who Should You Tell?
Make sure to keep your ticket safe and sign the back of it until you are ready to come forward. You may wish to see an attorney or financial advisor first, and you should then contact the relevant state lottery and inform them that you have a winning ticket. The officials will ask you a series of simple questions about your ticket and check the information you provide against their own records, before setting up a meeting to validate the ticket.
This meeting will be arranged at a suitable time, and you will be asked to provide identification as well as your winning ticket. The lottery officials will complete the relevant paperwork and you will be able to ask for expert advice.
It is your prerogative to tell whoever you want about your win, and winners have taken very different approaches in the past. Tennessee couple John and Lisa Robinson, who won one third of the record $1.58 billion Powerball jackpot in January 2016, went on the Today show before verifying their ticket with lottery officials. Marvin and Mae Acosta from California, winners in the same draw, didnвЂ™t come forward to claim their prize until six months later, after they had consulted a professional financial advisor to plan what they would do with their newfound wealth.
Receive Your Money
Before the money can be transferred to your account, you need to decide how you would like to be paid. Powerball winners can decide whether to accept the full amount in annual instalments over 30 years or accept a one-off lump sum. Take a look at the Cash Vs Annuity page to find out more. If you win the Powerball jackpot, you have to pay tax regardless of which option you choose.
Players should be aware that there is an immediate federal tax withholding of 24 percent for any winnings over $5,000, and the top federal graduated tax rate is 37 percent. You can check out the Powerball Taxes page for more information.
To Go Public or Not?
There are a growing number of states in which you are allowed to remain anonymous when you win the lottery – Arizona, Delaware, Georgia, Kansas, Maryland, New Jersey, North Dakota, Ohio, South Carolina, Texas, Virginia, West Virginia and Wyoming all allow winners to shield their identities. In some of these states there are conditions, where you must have won a certain amount to be able to stay private. Winners in Puerto Rico can also remain anonymous.
In other states, it is a condition of playing that the identity of winners is revealed, and it is customary for a press conference to be held. However, you are not required to speak at the press conference and some winners prefer to alter their appearance so they are not so easily recognized. Only your name and place of residence (your town or city) will be made public; all other personal information will not be disclosed.
A number of states also allow winners to claim their money through a trust fund or limited liability company, where a вЂlottery lawyerвЂ™ would come forward on your behalf, thus maintaining your anonymity. Of course, some winners embrace the publicity as it can help with business opportunities or charitable causes, and can take away the stress of having to live with such a big secret.
Live the Dream
Once the news has sunk in, you have received your money and considered the issue of publicity, you can start to enjoy your winnings. You should consult a financial expert for advice but it is up to you how to use your money, now that you are richer than some celebrities. The minimum Powerball jackpot is $20 million ( * During the Coronavirus pandemic, the starting jackpot may be lower than this), the same amount that BeyoncГ© once reportedly spent on a private jet for Jay-Z, so you could buy something similarly extravagant, move into the house of your dreams or travel the world in style, all while providing financial security for life for you and your loves ones.
Find out what steps to take if you win the Powerball jackpot, including how to claim your winnings, should you go public or not, and the different options for claiming a jackpot.
Do This Next If You Win The $750 Million Powerball Jackpot
(Photo by Justin Sullivan/Getty Images)
There’s a $750 million Powerball jackpot up for grabs.
Here’s what to do if you’re named the winner.
1. Assemble a team of experts
Winning the lottery is not as simple as cashing your ticket and buying your dream home.
When you become a hundred-millionaire, it’s imperative that you understand the implications of your new-found fortune. Assemble a team of experts who can assist you with your wealth management goals. At a minimum, your team should include a financial, legal and tax advisor to help manage your investments, tax planning, insurance and estate planning, among other important aspects of managing your wealth.
While hiring advisors can be a smart move, remember this: only you are in charge of your money. Therefore, always sign your own checks so you can trace your spending.
2. Remain anonymous (if you can)
Some people win the lottery and can’t wait to quit their job and flaunt their wealth.
That’s when your neighbors, coworkers, long lost cousins, and “friends” from high school suddenly appear eager to spend more time with you. That’s why your best move is to stay anonymous. If you are a lottery winner who lives in one of six U.S. states, you’re in luck. You can choose to remain anonymous in Delaware, Kansas, Maryland, North Dakota, Ohio and South Carolina. If you decide to remain anonymous, one way to protect your identity is to accept your lottery prize through a legal structure such as a trust. An attorney can help you establish the appropriate legal entity.
The remaining states, including Washington, D.C., Puerto Rico and the U.S. Virgin Islands require that winners publicly disclose their identity, including their name, city and prize amount.
3. Sign your lottery ticket
Make sure to sign your winning lottery ticket.
A lottery ticket is considered a bearer instrument, which means that whoever signs the ticket can claim the lottery prize. The name you sign depends.
If you live in a state in which you can remain anonymous, you may choose to form a trust to accept your Powerball prize. Consult your team of advisors to determine what is best for your specific circumstances.
4 . Decide between the lump sum and annuity payments
If you’re the next Powerball winner, you must choose either an upfront, lump-sum cash payment or annuity payments.
With the lump-sum payment, you receive the approximately $465.5 million in cash now in a single payment (minus withheld taxes and a discount rate for receiving the cash upfront). Or, you can elect to receive annuity payments that total $750 million (pre-tax) over the next 30 years (and you’ll be responsible to pay income taxes as you receive the payments).
“A dollar today is worth more than a dollar tomorrow” goes the general financial lesson about the time value of money. The lump-sum payment is preferable if by investing the lump-sum today you’ll end up with more than the (after-tax) annuity payments over the 30 years.
However, if you’re concerned about spending your money too quickly, then choosing the annuity payments may be more prudent. It’s not necessarily the best financial choice, but it may keep you organized and clear of financial loss.
5. Get your financial house in order
Before you buy mansions, yachts and a G5, your first move should be to pay off debt.
With some types of consumer debt, you could keep your balances outstanding and earn a higher financial return in the stock market. But why? As a hundred-millionaire, do you really want to worry about monthly debt payments? Get out of debt first and wipe your slate clean.
Powerball Lottery Q&A
How do you play Powerball?
Choose five numbers from 1 to 69 and one Powerball number from 1 to 26. You can also select Quik Pik and the numbers will be selected automatically for you.
Where can I play Powerball?
The Multi-State Lottery Association administers Powerball across 44 states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands. You can’t play in these six states: Alabama, Alaska, Hawaii, Mississippi, Nevada and Utah.
How much does it cost to play Powerball?
Each ticket costs $2. There is no limit to the number of tickets that you can purchase.
What are the odds on winning the Powerball jackpot?
The odds of winning the Powerball jackpot are about 1 in 292 million.
If there is no winner and the jackpot increases, what are the odds of winning the next Powerball jackpot?
The odds always remain the same at about 1 in 292 million, and do not change based on the dollar size of the Powerball jackpot.
This is the 4th largest Powerball jackpot in history.