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How to disperse multi-million dollar winnings?

Topic closed. 23 replies. Last post 2 years ago by myturn.

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CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
TX
United States
Member #121193
January 4, 2012
1637 Posts
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Posted: May 13, 2015, 8:39 pm - IP Logged

If i spread Preparation H all over you, will you become less irritating and go away ?

Stay Positive, Believe and good things will come your way

    RJOh's avatar - chipmunk
    mid-Ohio
    United States
    Member #9
    March 24, 2001
    19823 Posts
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    Posted: May 14, 2015, 12:09 am - IP Logged

    Paraphrasing advice previously found on LP.

    Open a million dollar checking account in the names of all your relations.  Provide each with a checkbook and instructions to only withdraw what they need. 

    Move to a state with no city or state income taxes like Florida.

    BobP

    Do you really think if you won a major lottery jackpot, all your relatives would be happy sharing a millions dollars from you?  Remember the guy in Canada who split the jackpot with a friend who split the cost of the tickets and was sued by his sister because she thought she deserved as much as his friend even though she had contributed nothing to the cost of the tickets.

     * you don't need to buy more tickets, just buy a winning ticket * 
       
                 Evil Looking       

      CDanaT's avatar - tiger avatar_04_hd_pictures_169016.jpg
      TX
      United States
      Member #121193
      January 4, 2012
      1637 Posts
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      Posted: May 14, 2015, 7:16 am - IP Logged

      Do you really think if you won a major lottery jackpot, all your relatives would be happy sharing a millions dollars from you?  Remember the guy in Canada who split the jackpot with a friend who split the cost of the tickets and was sued by his sister because she thought she deserved as much as his friend even though she had contributed nothing to the cost of the tickets.

      Thanks for the reminder RJOH, another reason to claim via trust, TELL NOBODY  and have only the ATTY be present to accept the check.

      Stay Positive, Believe and good things will come your way

        RJOh's avatar - chipmunk
        mid-Ohio
        United States
        Member #9
        March 24, 2001
        19823 Posts
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        Posted: May 14, 2015, 7:58 am - IP Logged

        Thanks for the reminder RJOH, another reason to claim via trust, TELL NOBODY  and have only the ATTY be present to accept the check.

        To hell with a trust, if I ever win a lottery jackpot I plan on living like I won a lottery jackpot with a nicer home and a few toys I never thought I would be able to afford.  It doesn't bother me to see relatives and others enjoying things I can't afford so why should having the same advantages bother them?

         * you don't need to buy more tickets, just buy a winning ticket * 
           
                     Evil Looking       

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          fajardo
          United States
          Member #152445
          February 15, 2014
          47 Posts
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          Posted: May 14, 2015, 8:31 am - IP Logged

          One of your most important assets would be a good tax attorney and cpa , they would help you navigate the tax code and all of its loop holes.

          I personally have decided that I will set a blind trust fund with around 2-5 million for each and they would only get 25k or 75% of the interest generated annually. Provision will be made for medical emergency and first home purchase . I don't do this for my benefit but for theirs , I want to give them financial security and make them feel more comfortable but I don't want them to go crazy.  An extra 25k a year is awesome and can improve your lifestyle greatly by a lot but is not enough for you to act crazy.

          The reason for the blind trust is that I feel like if they don't know what they have, there will be less issues.

            Avatar
            Arizona
            United States
            Member #165073
            March 24, 2015
            220 Posts
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            Posted: May 14, 2015, 8:27 pm - IP Logged

            All jackpot winners should do some research into filing  IRS form 4852 when claiming lottery winnings.

            "Substitute for Form W-2, Wage and Tax Statement, or Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc."? What does that have to do with lottery winnings?

              Teddi's avatar - Lottery-008.jpg

              United States
              Member #142499
              May 13, 2013
              1182 Posts
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              Posted: May 15, 2015, 8:35 pm - IP Logged

              As silly as it may sound, I would pay off my families major bills; mortgages, car loans, hospital bills etc (my sister has major bills in all of these. But then once they are paid off I would just give them a bit of cash because eliminating their bills, frees their own monies up.

              Please do not do that unless you're sure that they will not exceed the allocated lifetime gift allowance. Hospital bills are exempt IF you pay the hospital directly, but none of the other things you mentioned are. You could be setting yourself up for a huge financial penalty.

                Bondi Junction
                Australia
                Member #57242
                December 24, 2007
                1102 Posts
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                Posted: May 18, 2015, 6:22 am - IP Logged

                We all fantasize about winning big money, and I've gone through scenarios in my head many times. But what always gets me is how would i be able to disperse / share my winnings with my family and close friends?

                The way I understand it, I would have to pay the 39.6% federal tax (25% taken of the top), and 4.35% state tax (Michigan)

                For all intents and purposes that's 45%. So say I win a big jackpot and take home $25M after 45% taxes. If I give $10M to my sister, does this mean she'd have to pay 45% tax on the $10M then? Could I pay the taxes for her, but wouldn't that tax money that I pay for her be taxable? Plus isn't there something like a luxury gift tax where if I give over $5M in my life I owe another 40% tax on anything I gift?

                So the way I read it in the end:

                I win $45M, pay $20M taxes and end up with $25M free and clear.

                I give $10M to my sister, she pays $4.5M taxes, with $5.5M free and clear.

                But then I pay $4M gift tax in addition? So I would really need $14M for her to end up with $4.5M? That's insane if I'm reading this right. Feds get $9.5M in addition to the $20M already paid?

                If/when I win, I will focus on long-term financial security, not "sharing" it with other people. If you go down that road, you will find yourself back where you started.

                We all get a lot out of lotteries!

                  Bondi Junction
                  Australia
                  Member #57242
                  December 24, 2007
                  1102 Posts
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                  Posted: May 18, 2015, 6:36 am - IP Logged

                  As silly as it may sound, I would pay off my families major bills; mortgages, car loans, hospital bills etc (my sister has major bills in all of these. But then once they are paid off I would just give them a bit of cash because eliminating their bills, frees their own monies up.

                  If you are lucky enough to win, please get independent professional financial advice before you do anything or tell anyone. A win would be the opportunity of a lifetime to establish long-term financial security, you shouldn't blow it.

                  We all get a lot out of lotteries!