PB 320Million$... how does one(JP winner) get the money anyway??Prev Topic Next Topic

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Anfang71

Japan
Member #131,599
August 14, 2012
372 Posts
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Aug 14, 2012, 10:39 pm

I'm quite new playing the lottery. I actualy just started back in June. About 2 months ago. I am from Florida but am living in Japan at the moment. Iwent back in June time frame and started playing the powerball...but also the regular Lotto. Ha I was waery to play the Lotto since it was usualy only 1 or 2 million before reseting, although now its about 17 million. I figured if I'm gonna play I might as well go for the Bigger fish!

Ok, ok.... what I am confused about is....If one takes the lump sum, for this example, as I surely would, how do you...or rather what do you have to do to get this money? So I heard many people say you have to literaly create 100's of different accounts to put a certain amount in them....beacuse "bank accounts only allow you to have up to a certain amount of money in them." Sounds like a lot of work! I've heard some friends and aquaintances say "Nooo...it's just a number and it can be wired to your account." Well...might I ask what are you suppose to do? Is it as easy as that or must one make many accounts and have lawyers? Now why do I "need" a lawyer? I'm quite managable with my finances. Trust me this much money would not make be splurge and buy junk. I just want enough to not work; have a decent house(no mansion crap!) and 1 or 2 elegant vehicles. You know, be able to not have to worry if I can buy that latest system...or game. yada yada! LOL If I win this (anyamount) I already commit myself I will split it 3 ways with my siblings. Then ofcourse from there we can all give a bit here and there to Family members.

haha I know I'm ranting on....just kind of excited...I guess even to be a "part" of this magnificant JP. Since It was only getting up to about 70Million when I first started playing Well if anyone can advise of the question(s) I put forth will be great.

Oh AND GOOD LUCK ALL MY FELLOW POWERBALL PLAYERS!!!
djklaugh

Portland,Oregon
United States
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April 25, 2005
229 Posts
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Aug 14, 2012, 11:49 pm

While you might not need a lawyer to collect a jackpot it would be a very good idea to at least consult a financial advisor before collecting it. They could help you set up the right kind of accounts to deposit the money in, help you plan to avoid as much tax burden as possible, and help you decide on investments etc. You probably would need a lawyer if you want to share the money with family or friends - best to set up a trust or similar legal entity prior to collecting big winnings if you want to share - collecting first and then sharing means huge tax liability for you AND for people you share with. Even though you are living in Japan at the moment - if you do not have a legal US residence the IRS will still collect 25% of your winnings. Other concerns/considerations include collecting big money anonymously if possible - other wise every long lost cousin, new BFF, and scammers of many varieties will try to hassle you and persuade you to go along with their scheme. Since most bank accounts are insured for only about $100,000 most banks do not want to have huge accounts - there is a way to deposit money into multiple linked accounts but again you'd want to consult a financial advisor about this. Believe me a huge jackpot (or even a medium size one) is NOT the same as managing your personal finances from just wage/salary income! Look around here at LP - there are many threads discussing these concerns - the search function is your friend :)

Djklaugh

Some things have to be believed to be seen.

"I have not failed. I have just found ten thousand things that don't work". Thomas Edison
Pinkpansies

United States
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February 27, 2008
112 Posts
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Aug 14, 2012, 11:49 pm

The reason that people might tell you to set up hundreds of accounts is probably because the FDIC will only insure a certain amount in each account if the bank goes under. I know that there are some credit unions in which you can only have a certain amount (usually anywhere from $100,000 to $250,000).

If you needed to make sure that you could have that amount wired into you account, then the best thing to do would be to talk with your local manager or president your bank. They would be able to tell you exactly how much you could have wired to your account and they could help you set up the type of account you might need. I read a story once where a couple took their local Bank of America representative with them when they went to claim their money, you know that the bank made sure that their clients could get their wire transfer from the lottery.

One reason you might want a lawyer and accountant though, is because they could advise you on tax strategies so that you could keep more of your millions. You can do it on your own too, it just depends on what you want to do.
Anfang71

Japan
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August 14, 2012
372 Posts
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Aug 15, 2012, 3:28 am

I see. So I would have to set up more accounts perse? Ok. Well the account you described sounded quite good and hopefuly rather easy to do. Since ofcourse the bank will be doing it. The one where the accounts are all hooked to eachother. So this would mean I'd only need one Credit Card and Pin number, right? Not 100's or thousands? SO the lottery waits for you to have all this set up before you get your winnings? I use a bank called NavyFederal

And shoot I must ask the question on TAX. Since I'm a resident of Florida...there is no state tax....so the Government takes its 25% out (I heard up to 35%)...what other taxes need to come out?!! And if you are no longer working how do they take taxes from the money you already won which they already TAXED before you got it. I can't imagine you have to fill out your Tax return just to let the FED know you won the lottery,took the lump sum which was TAXED, so they can take more from it..say in the ball park of 1-2 million$ every year/time you fill one out?? Even then why would they tax my brother after I give him some of my winnings which were already taxed. I'm just thinking the absurdity of it.... Similiar principle to heres a 100 dollars lump sum you won. You really get 75$. Oh you forgot to have it split 3 ways before you collected it/you are going to give some to 2 other people....we will be taxing there half as well even though we already taxed the original.

Uhhg I don't know man.... I just hope I can get a hold of good lawyer/accountant.... how do I know THEY won't try to cheat me abit? I'm sure they want a hefty sum...500,000 - a million.

Thanks much for the help/advise
djklaugh

Portland,Oregon
United States
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April 25, 2005
229 Posts
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Aug 15, 2012, 4:33 am

The feds take 25% up front before you ever get any money from a jackpot. You might need to pay more when you file your taxes depending on what kind of measures you take to avoid paying taxes ( avoiding taxes is legal, evading taxes is illegal). Another good reason to have a good accountant working with you. Accountants and lawyers are licensed by the state and you can check them out with the state licensing board. They also are required to state their fees up front - and give you a written contract stating any and all fees if you choose to hire them- most of them charge by the hour though some will charge by the job. And for accountants or financial advisors you might be able to hire one on retainer (a yearly fee for them to do periodic work for you) If you win a big jackpot the state lottery office can provide you with a list of attorneys and accountants in your area. As for a family member or friend paying taxes on money you give them - it depends on how you set it up - the IRS limits gifts to individuals to $12,000 per year. Above that the recipient has to pay gift taxes. BUT if you engage and attorney and set up a family trust (or some other legal entity) so that the trust collects the jackpot then disperses the money as per your instructions - then the recipient(s) are responsible for taxes on what they receive - and you are responsible for taxes on the money you keep for your self. IF you collected the jackpot by yourself first then you would be responsible for taxes on the whole amount. So just for example say you won 20,000,000 in a lottery. And you set up a family trust and give 2,000,000 to a brother, 2,000,000 to a sister, and 2,000,000 to a son or daughter. And you keep 14,000,000 for your self. Each person receiving 2,000,000 would pay 25% to the IRS plus any state tax in the state where they live. And you would pay 25% on the 14,000,000.
However if you collected the 20,000,000 first and then give each person 2,000,000 - you'd pay 25% of the 20,000,000 to the IRS and then each person would have to pay gift tax on what they receive over $12,000 - and gift taxes can be really high - up to 35% or so. So yes the money would be taxed twice -

It really is in your best interests to hire compentent advisors BEFORE collecting a jackpot!

Djklaugh

Some things have to be believed to be seen.

"I have not failed. I have just found ten thousand things that don't work". Thomas Edison
LottoL

Texas
United States
Member #33,718
February 24, 2006
764 Posts
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Aug 15, 2012, 6:09 am

Quote: Originally posted by djklaugh on Aug 15, 2012
The feds take 25% up front before you ever get any money from a jackpot. You might need to pay more when you file your taxes depending on what kind of measures you take to avoid paying taxes ( avoiding taxes is legal, evading taxes is illegal). Another good reason to have a good accountant working with you. Accountants and lawyers are licensed by the state and you can check them out with the state licensing board. They also are required to state their fees up front - and give you a written contract stating any and all fees if you choose to hire them- most of them charge by the hour though some will charge by the job. And for accountants or financial advisors you might be able to hire one on retainer (a yearly fee for them to do periodic work for you) If you win a big jackpot the state lottery office can provide you with a list of attorneys and accountants in your area. As for a family member or friend paying taxes on money you give them - it depends on how you set it up - the IRS limits gifts to individuals to $12,000 per year. Above that the recipient has to pay gift taxes. BUT if you engage and attorney and set up a family trust (or some other legal entity) so that the trust collects the jackpot then disperses the money as per your instructions - then the recipient(s) are responsible for taxes on what they receive - and you are responsible for taxes on the money you keep for your self. IF you collected the jackpot by yourself first then you would be responsible for taxes on the whole amount. So just for example say you won 20,000,000 in a lottery. And you set up a family trust and give 2,000,000 to a brother, 2,000,000 to a sister, and 2,000,000 to a son or daughter. And you keep 14,000,000 for your self. Each person receiving 2,000,000 would pay 25% to the IRS plus any state tax in the state where they live. And you would pay 25% on the 14,000,000.
However if you collected the 20,000,000 first and then give each person 2,000,000 - you'd pay 25% of the 20,000,000 to the IRS and then each person would have to pay gift tax on what they receive over $12,000 - and gift taxes can be really high - up to 35% or so. So yes the money would be taxed twice -

It really is in your best interests to hire compentent advisors BEFORE collecting a jackpot!

Question: Say you won the Powerball draw tonight 8/15/2012. But you didn't cash your ticket in until 2013.

Is your tax year for declaring your winnings 2012 or 2013?

Thanks in advance.

Good Luck!
markman

United States
Member #109,659
April 17, 2011
132 Posts
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Aug 15, 2012, 6:34 am

Quote: Originally posted by LottoL on Aug 15, 2012
Question: Say you won the Powerball draw tonight 8/15/2012. But you didn't cash your ticket in until 2013.

Is your tax year for declaring your winnings 2012 or 2013?

Thanks in advance.

Good Luck!

With a jackpot this large you would lose a lot of interest on your money waiting to collect your prize...As far as I know taxes are due in the year the money is available to you. Delaying claiming the ticket would really complicate your situation with the IRS in my humble opinion.
dallascowboyfan

Oklahoma
United States
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November 12, 2009
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Aug 15, 2012, 10:52 pm

Welcome to the LP Angfan.....

I Love Pink & Green 1908
Artist77

United States
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January 16, 2012
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Aug 21, 2012, 6:12 pm

You can get around the 250,000 limit by using The Certificate of Deposit Account Registry Service, or CDARS...it uses a network of banks across the country to provide the additional FDIC coverage needed. So it basically breaks up the money into groups of $250,000 at various banks.
mcginnin56

United States
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May 25, 2011
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Aug 21, 2012, 6:42 pm

Quote: Originally posted by Artist77 on Aug 21, 2012
You can get around the 250,000 limit by using The Certificate of Deposit Account Registry Service, or CDARS...it uses a network of banks across the country to provide the additional FDIC coverage needed. So it basically breaks up the money into groups of $250,000 at various banks.
Artist77

United States
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January 16, 2012
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Aug 21, 2012, 6:50 pm

Quote: Originally posted by mcginnin56 on Aug 21, 2012

lol Thanks. I only know this based on research for my own future lottery win. Most of my winnings will go into CDs.
Brcebrce

Ga
United States
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December 20, 2011
144 Posts
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Sep 15, 2012, 6:50 pm

You beat me to it Artist. I think CEDARS is insured up to $20 million.
Ronnie316

100

United States
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September 7, 2011
20,243 Posts
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Sep 15, 2012, 6:53 pm

Quote: Originally posted by Artist77 on Aug 21, 2012
lol Thanks. I only know this based on research for my own future lottery win. Most of my winnings will go into CDs.

Most of my winnings wil be given away.