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A present to family that says if I win powerball, I'll give you X%. Does that work?

Topic closed. 27 replies. Last post 4 years ago by Iesha Kelly.

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Posted: August 20, 2010, 3:12 am - IP Logged

I thought it'd be a fun present to give my family that says something like, "If I win the lottery jackpot,  I will share 20% with you (to my parent's of course)", and then for my sister and brother, I'd say "If I win the lottery jackpot, I will give you 5%. ".

 

Would that work?  Lol, the gift tax thing is crazy.  If you have prior arraginments where other people contribute to the lottery ticket, I heard it doesn't get a gift tax.

 

 

Any thoughts on this?


:)

 

 

How not fair would that be if I won like $20,000,000 and gave away $4,200,000 that had to pay $1,890,000 again in taxes.  Not fair!

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    CA
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    Posted: August 20, 2010, 3:33 am - IP Logged

    Yeah....We get taxed even before we get our pay checks, taxed again during tax season and taxed if we want to give that money away. It's tyranny I tell you.

    If I ever give money away it would be $12k/person each year max unless they offer to pay the gift tax.

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      minnesota
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      Posted: August 20, 2010, 3:39 am - IP Logged

      I know it wouldn't be tax free of course, but let's say the prize was $50,000,000 and I gave them gifts that said I'll contribute 5 cents to every ticket for you, would they be considered winners?  They'd get $2,500,000 each since they only contributed 5% of the ticket then of course pay the ensuing taxes, but I wouldn't get taxed then give a gift that would get taxed even more.  I don't see why it has to be 25% four ways if their contribution wasn't a full 25% each.

      That way I wouldn't be giving them the money, they'd be winning it with me.

      I'm pretty sure the gift tax is just a way to prevent people from unloading their wealth to family or friends before they die.  I doubt their focus is the lottery.

       

      Anyone?

       

      -Andy

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        Kentucky
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        Posted: August 20, 2010, 4:15 am - IP Logged

        I know it wouldn't be tax free of course, but let's say the prize was $50,000,000 and I gave them gifts that said I'll contribute 5 cents to every ticket for you, would they be considered winners?  They'd get $2,500,000 each since they only contributed 5% of the ticket then of course pay the ensuing taxes, but I wouldn't get taxed then give a gift that would get taxed even more.  I don't see why it has to be 25% four ways if their contribution wasn't a full 25% each.

        That way I wouldn't be giving them the money, they'd be winning it with me.

        I'm pretty sure the gift tax is just a way to prevent people from unloading their wealth to family or friends before they die.  I doubt their focus is the lottery.

         

        Anyone?

         

        -Andy

        Last year there was a thread about creating a Limited Partnership where each member was given different percentages. Some of the things we read on LP aren't 100% accurate so if you really do want to plan ahead for that multi-million jackpot prize, talk to an attorney or financial adviser before buying your winning ticket.

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          Posted: August 20, 2010, 4:20 am - IP Logged

          Why would you have to talk to an attoryney?  I'm pretty sure most everyone who does group buys doesn't talk to an attorney.

           

          I thought there had to be some established basis of agreement about splitting lottery tickets before the actual drawing.  Maybe sending them emails saying the plan, and if I won I could present the date of the email as a basis of an agreement.  That seems like it would work pretty well.

           

           

          There has to be some way of splitting the pot without doing it 100% evenly between all winners.

           

          What if I bought $50 worth of powerballs and my friend gave me $5, and I said ok, I'll give you 10%.  Doesn't that ever happen?

           

           

          By the way, I sent an email to powerball inquiring about variable percentages on dividing payouts on powerball.  Hopefully they will say I can do it.  I know the chances of winning are really, really low, but wouldn't it suck if you won and had to pay an extra 45% of already taxed money.  That would be like losing $6,750,000 on a $50,000,000 cashout when I would be splitting $15,000,000 with my family.  I'd be at $28,250,000 instead of $35,000,000.

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            Kentucky
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            Posted: August 20, 2010, 4:38 am - IP Logged

            Why would you have to talk to an attoryney?  I'm pretty sure most everyone who does group buys doesn't talk to an attorney.

             

            I thought there had to be some established basis of agreement about splitting lottery tickets before the actual drawing.  Maybe sending them emails saying the plan, and if I won I could present the date of the email as a basis of an agreement.  That seems like it would work pretty well.

             

             

            There has to be some way of splitting the pot without doing it 100% evenly between all winners.

             

            What if I bought $50 worth of powerballs and my friend gave me $5, and I said ok, I'll give you 10%.  Doesn't that ever happen?

             

             

            By the way, I sent an email to powerball inquiring about variable percentages on dividing payouts on powerball.  Hopefully they will say I can do it.  I know the chances of winning are really, really low, but wouldn't it suck if you won and had to pay an extra 45% of already taxed money.  That would be like losing $6,750,000 on a $50,000,000 cashout when I would be splitting $15,000,000 with my family.  I'd be at $28,250,000 instead of $35,000,000.

            If you do a search on Lottery Pools, you'll get a good idea of how many them end up in court. Bet many of these pools wished they had advice from an attorney before they set up the pool.

            "What if I bought $50 worth of powerballs and my friend gave me $5, and I said ok, I'll give you 10%.  Doesn't that ever happen?"

            There probably are many unequal partnerships formed, especially when the jackpots are high, but the answer depends on the state lottery regulations where you buy your tickets. One or two state lotteries might payoff in odd amounts but I believe the majority have room for only one signature on the back of their tickets.

              rdgrnr's avatar - walt
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              Posted: August 20, 2010, 5:47 am - IP Logged

              I thought it'd be a fun present to give my family that says something like, "If I win the lottery jackpot,  I will share 20% with you (to my parent's of course)", and then for my sister and brother, I'd say "If I win the lottery jackpot, I will give you 5%. ".

               

              Would that work?  Lol, the gift tax thing is crazy.  If you have prior arraginments where other people contribute to the lottery ticket, I heard it doesn't get a gift tax.

               

               

              Any thoughts on this?


              :)

               

               

              How not fair would that be if I won like $20,000,000 and gave away $4,200,000 that had to pay $1,890,000 again in taxes.  Not fair!

              Ha, ha. Think the tax thing is crazy now?

              Wait til after the first of the year when our beloved President reintroduces all the taxes that the last President cut.

              That will include the Death Tax so tell your heirs not to get too excited about their inheritance because the government is gonna take their half first.

              Yes, I know that they took half of it when you won it but the Death Tax will allow them to take half of what you have left of it again.

              Have a nice day.


                                                           
                                   
                                                       

               

               

               

               

                                                                                                                 

              "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                          --Edmund Burke

               

               

                truecritic's avatar - PirateTreasure
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                Posted: August 20, 2010, 5:53 am - IP Logged

                It would be my understanding that whatever you do to split your lottery winnings, it has to be done in a way that it is registered in your city clerk's office.  Not just some note saying you can have 5%.

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                  Posted: August 20, 2010, 1:12 pm - IP Logged

                  Good responses.

                  A 50% death tax is pretty high.  In a way, I guess they are saying if you want money you got to work for it.  You're not suppose to live off soemone elses empire.  In a way it makes sense, and in a way it's frustrating.

                  I'll let you guys know what the Minnesota State Lottery says.  I sent them an email.

                   

                   

                  It wouldn't seem fair if you can't have more than one winner with different percentage takes.  What if someone bought 100 tickets and you have 2 buddies who are like, "Hey, I want to put down $20".  There has to be a way to allow it.  If you can't, it's just downright Un-American! :)

                   

                  -Andy

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                    Posted: August 20, 2010, 2:28 pm - IP Logged

                    I thought it'd be a fun present to give my family that says something like, "If I win the lottery jackpot,  I will share 20% with you (to my parent's of course)", and then for my sister and brother, I'd say "If I win the lottery jackpot, I will give you 5%. ".

                     

                    Would that work?  Lol, the gift tax thing is crazy.  If you have prior arraginments where other people contribute to the lottery ticket, I heard it doesn't get a gift tax.

                     

                     

                    Any thoughts on this?


                    :)

                     

                     

                    How not fair would that be if I won like $20,000,000 and gave away $4,200,000 that had to pay $1,890,000 again in taxes.  Not fair!

                    I'm guessing it wouldn't work because of what several people on the lottery documentaries on TLC have said when you win a jackpot. One said everyone thinks you have just become their ATM and another winner said he gave numerous people $1,000,000 each and every single one of them blew it all and came back asking for more.

                    Those who run the lotteries love it when players look for consistency in something that's designed not to have any.

                    Lep

                    There is one and only one 'proven' system, and that is to book the action. No matter the game, let the players pick their own losers.

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                      Posted: August 20, 2010, 5:00 pm - IP Logged

                      I'm guessing it wouldn't work because of what several people on the lottery documentaries on TLC have said when you win a jackpot. One said everyone thinks you have just become their ATM and another winner said he gave numerous people $1,000,000 each and every single one of them blew it all and came back asking for more.

                      Well my family is very responsible, and if I won $50,000,000, I wouldn't need it all.  If anything, I'm the wreckless one, lol.  I've got a very responsible family who'd never ask for another penny.


                      What the heck am I going to do with $50,000,000 with interest?  I think it might be selfish to not give away 1/3 of it to people I care about.

                       

                       

                      There has to be a way to be able to split it and not incur a gift tax.

                       

                      If I buy 1,000 tickets over 10 years, I have a 1 in 1,952,491 in winning the powerball, but hey, crazier things have happened.

                       

                       


                      Is there a definitive answer to having variable payouts of a powerball or megamillions jackpot with prior agreements?

                      I.E. they will be paying 5 cents of every ticket I buy, or 10 cents of a multiplier ticket which I will pay in their name as a present.

                      No one seems to know!

                        RJOh's avatar - chipmunk
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                        Posted: August 20, 2010, 5:16 pm - IP Logged

                        I thought it'd be a fun present to give my family that says something like, "If I win the lottery jackpot,  I will share 20% with you (to my parent's of course)", and then for my sister and brother, I'd say "If I win the lottery jackpot, I will give you 5%. ".

                        Why so cheap?  It's not going to cost you any more if you never win to give your parents 25% and your siblings 12.5% each.  Plus if they ever accumulate any wealth you won't feel bad asking them to share since you have been so generous with what you had a snow ball chance is H... of ever having.

                        * you don't need more tickets * 
                        * just the right ticket * 
                           Wink 

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                          Posted: August 20, 2010, 5:25 pm - IP Logged

                          I thought it'd be a fun present to give my family that says something like, "If I win the lottery jackpot,  I will share 20% with you (to my parent's of course)", and then for my sister and brother, I'd say "If I win the lottery jackpot, I will give you 5%. ".

                          Why so cheap?  It's not going to cost you any more if you never win to give your parents 25% and your siblings 12.5% each.  Plus if they ever accumulate any wealth you won't feel bad asking them to share since you have been so generous with what you had a snow ball chance is H... of ever having.

                          I'm not sure if I'm following.  I thought 5% to my brother and sister each and 25% to my parents was pretty generous.

                          A 45% gift tax if they aren't registered on the winning ticket would be enforced.  That's crazy.

                           

                           

                          I just want to know if I can do this.

                          I thought about sending an email with this agreement to my family.  It would have a date of delivery and agreement.  I'm not sure if that would work though.

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                            Posted: August 20, 2010, 8:39 pm - IP Logged

                            Being the master of the obvious that I am, you have to win first.....no sense in hiring an attorney and setting anything up.

                            Let's say you do win, you go ahead and claim and decide to give $$ (say 5-10%)after claiming.  If the amount of money you give away is more than $13,000, you will have to pay gift tax on the amount you give away.

                            If you won, your best bet would be to get an attorney to draft up an agreement that would allocate the amount you wish to share. Develop a way that would protect the assets for all parties involved.  Then get your family involved. Claim the lottery with the various shares divvied up before claiming.


                            Ex:  you win $50,000,000 before tax.  In your agreement before claiming, you have allocated 10% or $5,000,000 to another family member .  You would pay taxes on $40,000,000, the family member will pay taxes on the $5,000,000.  Why create another tax burden to yourself in the gift tax to the other family member when you have already paid income tax?  If they bulk at having to pay taxes on $5,000,000 (net $3,000,000 after Fed and any applicable state taxes) then you need to find another family member to give the money to.

                             

                            I have thought about this too, in great detail. It would be nice to give an IOU to a family member, but it just becomes unfulfilled promise.

                             

                             

                            Best of luck.

                              RJOh's avatar - chipmunk
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                              Posted: August 20, 2010, 9:52 pm - IP Logged

                              If you fill out a IRS form 5754 with your family members names, social security numbers and their share of the jackpot before you make a claim,they will be treated as members of a lottery pool , get a W-2G and be responsible for any taxes owed on their share of the jackpot.

                              * you don't need more tickets * 
                              * just the right ticket * 
                                 Wink