Never let lottery assign you an annuityPrev TopicNext Topic

• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Aug 27, 2002, 7:23 am

  ▲▼

  The Brisbane, CA, "winner" apparently made the biggest possible mistake that could be made when purchasing lottery tickets. California still requires "Super Lotto Plus" players to choose cash or annuity WHEN they play, instead of after they win. The 43-year-old GRANDMOTHER not only has to wait until age 68 to receive all her winnings, but the payments are "backloaded"-the first payment is the smallest. I bet whatever financial advice she's receiving includes being told she should have chosen lump sum. Now she's stuck with whatever annuity is being assigned to her, instead of being able to "shop around" for investing. If she moves (assuming she doesn't have a PO box), she has to notify the CA Lottery, as well as if any of her checks arrive late. What if she dies before receiving all her payments (remember she is a grandma), and if her heirs have to pay inheritance tax UP FRONT on the remaining winnings? CA needs to change the rules so players can choose AFTER they win (and so does New York, where I live).
• RJOh

  

  100

  mid-Ohio
  United States
  Member #9
  March 24, 2001
  20,272 Posts
  Offline
  Aug 27, 2002, 5:37 pm

  ▲▼

  I read the article about th
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Aug 28, 2002, 4:28 am

  ▲▼

  The issue here is NOT whether "cash is always the way to go". California still requires the cash/annuity choice be made when you PLAY instead of after you win. The time to make such an important financial decision should be AFTER you win, not before.
• wishin

  

  United States
  Member #562
  August 12, 2002
  22 Posts
  Offline
  Aug 31, 2002, 5:16 pm

  ▲▼

  ok, i guess i need some additional clarification on the cash only vs annuities, both pro and con.  also, i don't understand why the decision should be after one wins rather than before.  anyhow, this is how i perceive the situation.....   

        cash only - less total amount received

                       - hope a financial firm knows what they're doing 

  
  

  
  

  
  

     - invest poorly and it's lost

  
  

  annuity - total is more

  
  

              - invest poorly/bad advice, more money will be coming

  
  

  Just curious on other people's views..... want to be prepared, just in case.  lol

  
  

   

  
  

  
  

   

  
  

   

  
  

   

   
• Todd

  

  50

  Chief Bottle Washer

  New Jersey
  United States
  Member #1
  May 31, 2000
  27,960 Posts
  Offline
  Aug 31, 2002, 5:26 pm

  ▲▼

  Annuity = No control over your money

  Annuity = Up-front death taxes to your heirs if you die during annuity period, even though the annuity still only gets paid yearly

  Annuity = Much less leverage with your money because you have less on-hand

  Annuity = Much less money if you have a problem down the road and need to have it bought out

  Definitely go with cash.  It is not less, it's much more.

   

  Check the State Lottery Report Card
  What grade did your lottery earn?

   

  Sign the Petition for True Lottery Drawings
  Help eliminate computerized drawings!
• ejflashfold

  

  United States
  Member #509
  July 24, 2002
  8 Posts
  Offline
  Sep 1, 2002, 2:46 pm

  ▲▼

  CASH!!!!Cash CASH and nothing less. Avoid gimmicks.
• rundown99

  

  United States
  Member #567
  August 14, 2002
  526 Posts
  Offline
  Sep 2, 2002, 3:42 pm

  ▲▼

  I myself was wondering whether cash is better or annuity.  I haven't won a jackpot but I want to know just in case.  Of the most recent powerball jackpot winners of the past 2 years, almost all of them selected cash, but what if they screw up in a bad investment?

   
• rundown99

  

  United States
  Member #567
  August 14, 2002
  526 Posts
  Offline
  Sep 2, 2002, 4:15 pm

  ▲▼

  CASH Only

  You said that the grandmother will have checks mailed to her.  But couldn't she do direct deposit in this day of age, so that no matter where she is, the money will always reach her bank account.
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Sep 2, 2002, 5:01 pm

  ▲▼

  I'm not sure if the "direct deposit" program applies to non-US government checks. Regardless, she should have chosen CASH (when she played) so she wouldn't have to worry about getting future payments. As for making "bad investments" on a lump sum prize, it's vital to get expert financial advice ASAP after you win (probably from persons representing different ways of investing).
• Littleoldlady

  

  100

  Clarksville
  United States
  Member #487
  July 15, 2002
  17,638 Posts
  Offline
  Sep 14, 2002, 4:35 am

  ▲▼

  If she fits the life span statistic, she will live to be at least 76.5 years old.  Also by being a female, you can probably add 5-10 years to that.  Women are very conservative by nature.  Women are adept at  survival skills.  She did the right thing.

   
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Sep 14, 2002, 7:27 am

  ▲▼

  Dear littleoldlady: CA needs to change the rules so that the choice can be made AFTER you win. As for someone's life span, there is NO guarantee (always remember 9/11) that someone will live long enough to receive all their payments. What if she dies, and her heirs (grandchildren, etc) have to pay inheritance tax UP FRONT (within 10 months of the winner's death) on the future lottery payments, and they can't pay off the IRS bill ? People who want the annuity DON'T consider all the potential consequences, especially when it comes to whoever is in the winners' will. BTW, I thought women were more "liberal" than men, but that's another issue.
• rundown99

  

  United States
  Member #567
  August 14, 2002
  526 Posts
  Offline
  Sep 14, 2002, 12:46 pm

  ▲▼

  That's what I was wondering about???

  What do you mean by UP FRONT?  Does that mean that the first several annual payments after one's death will be confiscated by the IRS because of taxes or will the tax just become larger each year?
• CASH Only

  United States
  Member #379
  June 5, 2002
  11,296 Posts
  Offline
  Sep 14, 2002, 1:09 pm

  ▲▼

  My understanding is that if the estate cannot pay the inheritance tax in full (on the remaining payments) within 10 months of the winner's death, the estate would not be able to receive any more annuity checks until the tax is paid, even if the estate has to sell their assets. The estate would also have to pay interest on the inheritance tax they owe. I MAY BE WRONG; please correct me if necessary.