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Strategy for remaining anonymous

Topic closed. 52 replies. Last post 5 months ago by zephbe.

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New Member
Columbia, SC
United States
Member #175832
July 7, 2016
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Posted: July 7, 2016, 10:40 am - IP Logged

If you don't live in a state that allows anonymity, or you don't trust that you will continue to remain anonymous (i.e., FOIA request), I propose the following strategy.  Please shoot holes in this plan and let me know what I'm forgetting.

For Friday's MM drawing I figure that if I wanted to claim the ticket PUBLICLY (I don't), by the time tax time comes NEXT YEAR, I would expect to have about $195,000,000.00.  I arrived at this using the following math. 

Lump Sum Gross: $357,700,000.00
North Carolina State Tax (5.75%): $20,567,750.00
Federal Taxes (39.6%): $141,649,200.00
Net: $195,483,050.00

Note: This is just an estimate.  I realize that the lottery doesn't withhold this much initially, but it will be around this much come tax time. Also I realize my federal taxes would likely be a bit lower due to deducting part of my state taxes.  But for simplicity, let's just say $195,000,000

Now, here is the plan:

Priority 1: Maintain Anonymity.
Priority 2: Walk away with something close to $195,000,000 (+/- 10%)

  1. Contact an Estate/Tax attorney (partner) at a huge national law firm.
  2. "Sell" the law firm (or an individual partner at the law firm) the unclaimed ticket. (or, create a contract to sell the ticket once it's been collected...)
  3. Have a partner at the Firm redeem the ticket (as if they had won themselves).  They would do the required press conference, and their name would be released to the public.
  4. Once the money has cleared to the partner's bank account, transfer it to my account (or a trust, etc) as per the contract we had drafted in step 2.
  5. Once all money has been transferred to the correct accounts, the partner is free to issue their own press release indicating that they had purchased the ticket from a anonymous 3rd party. This would hopefully get the people begging for money off of their backs.

What is wrong with this plan? 

I realize I'd probably have to pay a lot of money to accomplish this to the Law Firm (how about $5,000,000?) and the Partner themselves for the inconvenience of having their name released (how about $1,000,000?).  But I'm betting that most law firms would take this on for the possibility of having $5,000,000 payday for what I doubt would be a lot of legal work. And I'd be happy to pay ~$6,000,000 (just an estimate) in order to guarantee my anonymity.

I also realize that there would be a lot of money "floating around" between the law firm, partner, and my account until tax time of next year, but since my #1 goal is anonymity I don't really care much assuming I eventually get the full amount.  The plan as described would allow be to walk away anonymously with about $189,000,000, which I would be ecstatic about.

Side question:  Let's assume that the Law Firm had an office in state that doesn't tax lottery winnings (i.e., FL or TX). Couldn't they have a Partner in that state redeem the ticket without having to pay any state income tax ($20,567,750.00 in my state).  That would let the firm clear a lot more money than if they claimed it in a state such as North Carolina.

    HoLeeKau's avatar - YheaShea
    Idaho
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    Member #94283
    July 17, 2010
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    Posted: July 7, 2016, 10:58 am - IP Logged

    I think the tax laws might get ya.  You can only claim a ticket in the state that it was purchased, so the only way the law firm could claim in NC or TX is if the ticket was purchased there.  If someone in NC redeems a ticket purchased in, say, Georgia, then Georgia takes their taxes as far as I know.  Someone correct me if this is wrong.

    Plus, the law firm would pay federal taxes on the prize no matter where it was bought or redeemed.  Then when it's transferred to your trust, my guess is you would then have to pay taxes on it too.  Money is usually re-taxed whenever it changes hands.  Plus pay the law firm whatever they want to charge in order for them to do this for you.  That's a humongous tax burden just to stay anonymous.

    I'm not a tax expert, and there may be some loopholes that might save you some tax money.  But I doubt you'd walk away with 195 mil.

      Kingofearth's avatar - Kinnak
      Upstate NY
      United States
      Member #174656
      May 5, 2016
      753 Posts
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      Posted: July 7, 2016, 11:00 am - IP Logged

      If you don't live in a state that allows anonymity, or you don't trust that you will continue to remain anonymous (i.e., FOIA request), I propose the following strategy.  Please shoot holes in this plan and let me know what I'm forgetting.

      For Friday's MM drawing I figure that if I wanted to claim the ticket PUBLICLY (I don't), by the time tax time comes NEXT YEAR, I would expect to have about $195,000,000.00.  I arrived at this using the following math. 

      Lump Sum Gross: $357,700,000.00
      North Carolina State Tax (5.75%): $20,567,750.00
      Federal Taxes (39.6%): $141,649,200.00
      Net: $195,483,050.00

      Note: This is just an estimate.  I realize that the lottery doesn't withhold this much initially, but it will be around this much come tax time. Also I realize my federal taxes would likely be a bit lower due to deducting part of my state taxes.  But for simplicity, let's just say $195,000,000

      Now, here is the plan:

      Priority 1: Maintain Anonymity.
      Priority 2: Walk away with something close to $195,000,000 (+/- 10%)

      1. Contact an Estate/Tax attorney (partner) at a huge national law firm.
      2. "Sell" the law firm (or an individual partner at the law firm) the unclaimed ticket. (or, create a contract to sell the ticket once it's been collected...)
      3. Have a partner at the Firm redeem the ticket (as if they had won themselves).  They would do the required press conference, and their name would be released to the public.
      4. Once the money has cleared to the partner's bank account, transfer it to my account (or a trust, etc) as per the contract we had drafted in step 2.
      5. Once all money has been transferred to the correct accounts, the partner is free to issue their own press release indicating that they had purchased the ticket from a anonymous 3rd party. This would hopefully get the people begging for money off of their backs.

      What is wrong with this plan? 

      I realize I'd probably have to pay a lot of money to accomplish this to the Law Firm (how about $5,000,000?) and the Partner themselves for the inconvenience of having their name released (how about $1,000,000?).  But I'm betting that most law firms would take this on for the possibility of having $5,000,000 payday for what I doubt would be a lot of legal work. And I'd be happy to pay ~$6,000,000 (just an estimate) in order to guarantee my anonymity.

      I also realize that there would be a lot of money "floating around" between the law firm, partner, and my account until tax time of next year, but since my #1 goal is anonymity I don't really care much assuming I eventually get the full amount.  The plan as described would allow be to walk away anonymously with about $189,000,000, which I would be ecstatic about.

      Side question:  Let's assume that the Law Firm had an office in state that doesn't tax lottery winnings (i.e., FL or TX). Couldn't they have a Partner in that state redeem the ticket without having to pay any state income tax ($20,567,750.00 in my state).  That would let the firm clear a lot more money than if they claimed it in a state such as North Carolina.

      If you give them or sell them the ticket to claim, then you lose all rights to the money. If you put it in a contract, then they would need to disclose it and the lottery would know who was the real winner and this will show you as the winner. Some states allow loopholes, others don't. Contact a trusts and estates attorney in your state and talk about strategies to maintain as much anonymity as you can for as long as you can. Or you can just go to South Carolina and buy a ticket there and not have to worry. Tickets must be claimed in the state purchased and witholdings will be taken out according to the state rate for the state you bought it in.

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        Columbia, SC
        United States
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        July 7, 2016
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        Posted: July 7, 2016, 11:39 am - IP Logged

        I think the tax laws might get ya.  You can only claim a ticket in the state that it was purchased, so the only way the law firm could claim in NC or TX is if the ticket was purchased there.  If someone in NC redeems a ticket purchased in, say, Georgia, then Georgia takes their taxes as far as I know.  Someone correct me if this is wrong.

        Plus, the law firm would pay federal taxes on the prize no matter where it was bought or redeemed.  Then when it's transferred to your trust, my guess is you would then have to pay taxes on it too.  Money is usually re-taxed whenever it changes hands.  Plus pay the law firm whatever they want to charge in order for them to do this for you.  That's a humongous tax burden just to stay anonymous.

        I'm not a tax expert, and there may be some loopholes that might save you some tax money.  But I doubt you'd walk away with 195 mil.

        Yes, they would claim it in NC, where I purchase the ticket.  Again, an individual (law firm partner) would be claiming the ticket.  My understanding is that you pay tax in the state you LIVE in, not where the ticket is purchased.  Only 2 states (AZ and MD) have enacted laws that will collect tax for non-residents.  So, only Federal and NC taxes would be due.

        Once the numbers have been drawn, the physical paper ticket is worth a HUGE amount of money.  That's because it's a bearer instrument.  If the law firm (or partner) purchased the ticket from me they would only owe tax on the difference in what it's worth, and what they paid for it.  So, I don't think the tax burden with this plan is much more than the tax burden if I'd redeemed the ticket myself publicly.

        Again, I'm not a tax expert.  But those were my thoughts.

          Avatar
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          Columbia, SC
          United States
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          July 7, 2016
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          Posted: July 7, 2016, 11:48 am - IP Logged

          If you give them or sell them the ticket to claim, then you lose all rights to the money. If you put it in a contract, then they would need to disclose it and the lottery would know who was the real winner and this will show you as the winner. Some states allow loopholes, others don't. Contact a trusts and estates attorney in your state and talk about strategies to maintain as much anonymity as you can for as long as you can. Or you can just go to South Carolina and buy a ticket there and not have to worry. Tickets must be claimed in the state purchased and witholdings will be taken out according to the state rate for the state you bought it in.

          My contract is between myself and the Law Firm, not with the lottery.  From the lottery's perspective the person walking in the door (a partner) is the owner.  They would pay them the full amount due. 

          Also, I believe state taxes are due in the state you reside, not the state the ticket is purchased in.  (except if won in Maryland or Arizona)

            Avatar
            South Carolina
            United States
            Member #18322
            July 9, 2005
            1704 Posts
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            Posted: July 7, 2016, 11:53 am - IP Logged

            If you don't live in a state that allows anonymity, or you don't trust that you will continue to remain anonymous (i.e., FOIA request), I propose the following strategy.  Please shoot holes in this plan and let me know what I'm forgetting.

            For Friday's MM drawing I figure that if I wanted to claim the ticket PUBLICLY (I don't), by the time tax time comes NEXT YEAR, I would expect to have about $195,000,000.00.  I arrived at this using the following math. 

            Lump Sum Gross: $357,700,000.00
            North Carolina State Tax (5.75%): $20,567,750.00
            Federal Taxes (39.6%): $141,649,200.00
            Net: $195,483,050.00

            Note: This is just an estimate.  I realize that the lottery doesn't withhold this much initially, but it will be around this much come tax time. Also I realize my federal taxes would likely be a bit lower due to deducting part of my state taxes.  But for simplicity, let's just say $195,000,000

            Now, here is the plan:

            Priority 1: Maintain Anonymity.
            Priority 2: Walk away with something close to $195,000,000 (+/- 10%)

            1. Contact an Estate/Tax attorney (partner) at a huge national law firm.
            2. "Sell" the law firm (or an individual partner at the law firm) the unclaimed ticket. (or, create a contract to sell the ticket once it's been collected...)
            3. Have a partner at the Firm redeem the ticket (as if they had won themselves).  They would do the required press conference, and their name would be released to the public.
            4. Once the money has cleared to the partner's bank account, transfer it to my account (or a trust, etc) as per the contract we had drafted in step 2.
            5. Once all money has been transferred to the correct accounts, the partner is free to issue their own press release indicating that they had purchased the ticket from a anonymous 3rd party. This would hopefully get the people begging for money off of their backs.

            What is wrong with this plan? 

            I realize I'd probably have to pay a lot of money to accomplish this to the Law Firm (how about $5,000,000?) and the Partner themselves for the inconvenience of having their name released (how about $1,000,000?).  But I'm betting that most law firms would take this on for the possibility of having $5,000,000 payday for what I doubt would be a lot of legal work. And I'd be happy to pay ~$6,000,000 (just an estimate) in order to guarantee my anonymity.

            I also realize that there would be a lot of money "floating around" between the law firm, partner, and my account until tax time of next year, but since my #1 goal is anonymity I don't really care much assuming I eventually get the full amount.  The plan as described would allow be to walk away anonymously with about $189,000,000, which I would be ecstatic about.

            Side question:  Let's assume that the Law Firm had an office in state that doesn't tax lottery winnings (i.e., FL or TX). Couldn't they have a Partner in that state redeem the ticket without having to pay any state income tax ($20,567,750.00 in my state).  That would let the firm clear a lot more money than if they claimed it in a state such as North Carolina.

            I noticed you are from South Carolina in your profile [Anonymity], but you are using North Carolina as an example [Non-anonymity].  Where do you currently live and play the lottery at ???

            Your tax strategy reasoning seems very complicated, and might not turn out the way you think it should. 

            If you live and play in South Carolina, then you don't have anything to worry about, as far as legal anonymity is concerned.

            You cannot trust how law firms will handle your money, b/c lawyers are in the business of figuring out how to scheme around the law.  Attorneys ALWAYS GET PAID, regardless of what the outcome is for the client.

             

            P.S.  I thought that if you live in North Carolina, but purchase the ticket in South Carolina, you have to pay 1) Federal Tax, 2) SC state tax, b/c you purchased the ticket in SC, and 3) NC state tax, b/c you live in NC.  Thus, you are Triple taxed.

             

            What is the correct tax law in this situation ???

              Think's avatar - lightbulb
              Marquette, MI
              United States
              Member #20541
              August 20, 2005
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              Posted: July 7, 2016, 11:57 am - IP Logged

              I don't see how you could do this without invoking the gift tax or paying income tax yourself.

              I don't know what the current gift tax is but it is a lot.

              You would either get  about 195,000,000 * .5465 = 106,567,000 less  whatever lawyer fees you paid or you would get 195,000,000 less the gift tax adjusted amount less lawyer fees which would be way less than the $195 million.

              Unless the lawyers can circumnavigate the gift tax you would probably have to pay the taxes on the $195m and wind up with around $100 mil after lawyers get done with you

              "The American Voter is too Stupid..."   Jonathan Gruber Obamacare Architect

              "There is no sin except stupidity" Oscar Wilde

              https://books.google.com/books?id=apm21IcqhmcC&pg=PP6&lpg=PP6&dq=americans+can+tolerate+just+about+anything+except+stupidity&source=bl&ots=tq9QUeP46j&sig=qXfXEz-wh_yUQSsE8DZG0ZjABls&hl=en&sa=X&ved=0ahUKEwil8YSjmuDPAhWF7IMKHV11A0kQ6AEIUzAI#v=onepage&q=americans%20can%20tolerate%20just%20about%20anything%20except%20stupidity&f=false

                LiveInGreenBay's avatar - driver
                Green Bay
                United States
                Member #169391
                October 15, 2015
                1243 Posts
                Online
                Posted: July 7, 2016, 12:10 pm - IP Logged

                No matter what you do...Eventually your family members, friends, banker and the media will know you won.  In the past, when bad things happened to lottery winners, it was usually the result of the dishonest people the lottery winner associated with.  Personally, I wouldn't mind the attention.  Rich and famous wouldn't bother me a bit.

                Never give up.  Banana

                  Avatar
                  NY
                  United States
                  Member #23835
                  October 16, 2005
                  3474 Posts
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                  Posted: July 7, 2016, 1:25 pm - IP Logged

                  First the easy stuff that doesn't have much wiggle room. You're proposing a simple and straightforward financial transaction: sell your financial instrument to somebody else. You'll have an acquisition cost, a selling price, and a gross income from the profit that doesn't qualify for capital gains treatment. In that respect the tax issues are essentially the same as they'd be if you claimed the prize yourself. It will also be the same for the buyer as any other financial transaction: they'll buy the ticket and pay taxes on their profit. Their tax rate may be different than for an individual, but their profit will be far less than the cash value, and the only reason their tax bill matters to you is that it affects what they're willing to pay for the ticket. Assuming the lottery (and state) still withhold the normal amount you'd have to figure on waiting for full payment for your sale, or having the sale price reflect their lost earnings while the company waits to get the money back when they file their tax return.

                  The only wrinkle I see with respect to the basic strategy would be how the tax authorities view the nature of your dealings with the company you use. If they treat it as a simple sale of the ticket everything works as above. OTOH, there's a chance they'll treat it as if you simply hired the company to act on your behalf. In that case you'd pay taxes on the entire cash value, with any money paid to the company treated as a non-deductible fee for services. Those fees would still be taxable income to the company, so no changes there.

                  As for where taxes are due, the state that sells the ticket gets first crack at state taxes. I don't know you got the delusion that only two states tax non-residents, but I promise you that a state that has an income tax on lottery winnings will tax the prize regardless of where the claimant lives. The state of residence is also entitled to tax on the income, but will apply a tax credit for the amount paid to the other state. In your example, if the winner was a SC resident NC would collect 5.75%, and SC would collect 1.25%, since their rate is 7%. In your scenario the company claiming the prize should be a NC entity, so they'd only pay NC tax. You should only pay SC income tax, since your income is from selling the ticket rather than from the NC prize. Since the company gets a tax deduction for the selling price of the ticket NC would lose about $20 million in income tax. Expect them to be unhappy, and possibly look for a way to collect it. If that happens SC may still  look for their 7% on the full sale price.

                  The real problem could be because the claimant isn't the person who bought the ticket. Forget what you think you know about bearer instruments. The ticket has a legal owner and the lottery isn't going to knowingly give the prize to somebody else simply because they're the one who walks through the door with the ticket. Unlike somebody who finds or steals the ticket the company representative will be able to answer all of the security questions, but they won't be the person on the security video. Claiming as a company instead of an individual would also be likely to raise questions. Figure there's a very good chance that could result in the lottery insisting on meeting the person who actually bought the ticket, so odds are they'll know who you are. The question then becomes what the exact rules about releasing the winner's name are. The company will clearly be the entity claiming the prize, but there's a perfectly valid argument that the person who bought the ticket and gets most of the money is the winner. You'd very much want to be sure about that detail before selling the ticket for several million dollars less than its actual cash value.

                    JAP69's avatar - alas
                    South Carolina
                    United States
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                    November 4, 2001
                    8790 Posts
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                    Posted: July 7, 2016, 1:28 pm - IP Logged

                    Don't win.

                    ROFL

                    WHATT

                      helpmewin's avatar - dandy
                      u$a
                      United States
                      Member #106665
                      February 22, 2011
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                      Posted: July 7, 2016, 1:28 pm - IP Logged

                      No matter what you do...Eventually your family members, friends, banker and the media will know you won.  In the past, when bad things happened to lottery winners, it was usually the result of the dishonest people the lottery winner associated with.  Personally, I wouldn't mind the attention.  Rich and famous wouldn't bother me a bit.

                      I Agree! this is why everyone is trying to win to be Rich and Famous don't let them fool you.

                      Let it Snow Snowman

                        helpmewin's avatar - dandy
                        u$a
                        United States
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                        Posted: July 7, 2016, 1:38 pm - IP Logged

                        Don't win.

                        ROFL

                        Because of the Lottery curse.Eek

                        Let it Snow Snowman

                          TheMeatman2005's avatar - lightening
                          Brooklyn, NY
                          United States
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                          October 29, 2015
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                          Posted: July 7, 2016, 1:46 pm - IP Logged

                          First the easy stuff that doesn't have much wiggle room. You're proposing a simple and straightforward financial transaction: sell your financial instrument to somebody else. You'll have an acquisition cost, a selling price, and a gross income from the profit that doesn't qualify for capital gains treatment. In that respect the tax issues are essentially the same as they'd be if you claimed the prize yourself. It will also be the same for the buyer as any other financial transaction: they'll buy the ticket and pay taxes on their profit. Their tax rate may be different than for an individual, but their profit will be far less than the cash value, and the only reason their tax bill matters to you is that it affects what they're willing to pay for the ticket. Assuming the lottery (and state) still withhold the normal amount you'd have to figure on waiting for full payment for your sale, or having the sale price reflect their lost earnings while the company waits to get the money back when they file their tax return.

                          The only wrinkle I see with respect to the basic strategy would be how the tax authorities view the nature of your dealings with the company you use. If they treat it as a simple sale of the ticket everything works as above. OTOH, there's a chance they'll treat it as if you simply hired the company to act on your behalf. In that case you'd pay taxes on the entire cash value, with any money paid to the company treated as a non-deductible fee for services. Those fees would still be taxable income to the company, so no changes there.

                          As for where taxes are due, the state that sells the ticket gets first crack at state taxes. I don't know you got the delusion that only two states tax non-residents, but I promise you that a state that has an income tax on lottery winnings will tax the prize regardless of where the claimant lives. The state of residence is also entitled to tax on the income, but will apply a tax credit for the amount paid to the other state. In your example, if the winner was a SC resident NC would collect 5.75%, and SC would collect 1.25%, since their rate is 7%. In your scenario the company claiming the prize should be a NC entity, so they'd only pay NC tax. You should only pay SC income tax, since your income is from selling the ticket rather than from the NC prize. Since the company gets a tax deduction for the selling price of the ticket NC would lose about $20 million in income tax. Expect them to be unhappy, and possibly look for a way to collect it. If that happens SC may still  look for their 7% on the full sale price.

                          The real problem could be because the claimant isn't the person who bought the ticket. Forget what you think you know about bearer instruments. The ticket has a legal owner and the lottery isn't going to knowingly give the prize to somebody else simply because they're the one who walks through the door with the ticket. Unlike somebody who finds or steals the ticket the company representative will be able to answer all of the security questions, but they won't be the person on the security video. Claiming as a company instead of an individual would also be likely to raise questions. Figure there's a very good chance that could result in the lottery insisting on meeting the person who actually bought the ticket, so odds are they'll know who you are. The question then becomes what the exact rules about releasing the winner's name are. The company will clearly be the entity claiming the prize, but there's a perfectly valid argument that the person who bought the ticket and gets most of the money is the winner. You'd very much want to be sure about that detail before selling the ticket for several million dollars less than its actual cash value.

                          The real problem could be because the claimant isn't the person who bought the ticket. Forget what you think you know about bearer instruments. The ticket has a legal owner and the lottery isn't going to knowingly give the prize to somebody else simply because they're the one who walks through the door with the ticket. Unlike somebody who finds or steals the ticket the company representative will be able to answer all of the security questions, but they won't be the person on the security video. Claiming as a company instead of an individual would also be likely to raise questions. Figure there's a very good chance that could result in the lottery insisting on meeting the person who actually bought the ticket, so odds are they'll know who you are. The question then becomes what the exact rules about releasing the winner's name are. The company will clearly be the entity claiming the prize, but there's a perfectly valid argument that the person who bought the ticket and gets most of the money is the winner. You'd very much want to be sure about that detail before selling the ticket for several million dollars less than its actual cash value.

                          Remember when Eddie Tipton bought his winning ticket and tried to get a NY lawyer to cash it? They wouldn't do it unless the law firm revealed who the person that actually purchased the ticket was.

                          They ended up forfeiting the prize. 

                          If you really don't want the media to find out who you are, I will cash the ticket for you and we can split 75/25 after all taxes!

                          The Meatman

                          “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                          Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

                            realtorjim's avatar - images q=tbn:ANd9GcT7U3t20NgScoPlxOqLT6TR0vQeJNBV3_tTswe1XeFDTsdw3NLZ

                            United States
                            Member #106923
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                            Posted: July 7, 2016, 2:42 pm - IP Logged

                            If you don't live in a state that allows anonymity, or you don't trust that you will continue to remain anonymous (i.e., FOIA request), I propose the following strategy.  Please shoot holes in this plan and let me know what I'm forgetting.

                            For Friday's MM drawing I figure that if I wanted to claim the ticket PUBLICLY (I don't), by the time tax time comes NEXT YEAR, I would expect to have about $195,000,000.00.  I arrived at this using the following math. 

                            Lump Sum Gross: $357,700,000.00
                            North Carolina State Tax (5.75%): $20,567,750.00
                            Federal Taxes (39.6%): $141,649,200.00
                            Net: $195,483,050.00

                            Note: This is just an estimate.  I realize that the lottery doesn't withhold this much initially, but it will be around this much come tax time. Also I realize my federal taxes would likely be a bit lower due to deducting part of my state taxes.  But for simplicity, let's just say $195,000,000

                            Now, here is the plan:

                            Priority 1: Maintain Anonymity.
                            Priority 2: Walk away with something close to $195,000,000 (+/- 10%)

                            1. Contact an Estate/Tax attorney (partner) at a huge national law firm.
                            2. "Sell" the law firm (or an individual partner at the law firm) the unclaimed ticket. (or, create a contract to sell the ticket once it's been collected...)
                            3. Have a partner at the Firm redeem the ticket (as if they had won themselves).  They would do the required press conference, and their name would be released to the public.
                            4. Once the money has cleared to the partner's bank account, transfer it to my account (or a trust, etc) as per the contract we had drafted in step 2.
                            5. Once all money has been transferred to the correct accounts, the partner is free to issue their own press release indicating that they had purchased the ticket from a anonymous 3rd party. This would hopefully get the people begging for money off of their backs.

                            What is wrong with this plan? 

                            I realize I'd probably have to pay a lot of money to accomplish this to the Law Firm (how about $5,000,000?) and the Partner themselves for the inconvenience of having their name released (how about $1,000,000?).  But I'm betting that most law firms would take this on for the possibility of having $5,000,000 payday for what I doubt would be a lot of legal work. And I'd be happy to pay ~$6,000,000 (just an estimate) in order to guarantee my anonymity.

                            I also realize that there would be a lot of money "floating around" between the law firm, partner, and my account until tax time of next year, but since my #1 goal is anonymity I don't really care much assuming I eventually get the full amount.  The plan as described would allow be to walk away anonymously with about $189,000,000, which I would be ecstatic about.

                            Side question:  Let's assume that the Law Firm had an office in state that doesn't tax lottery winnings (i.e., FL or TX). Couldn't they have a Partner in that state redeem the ticket without having to pay any state income tax ($20,567,750.00 in my state).  That would let the firm clear a lot more money than if they claimed it in a state such as North Carolina.

                            Hmmm... Let's try this scenario;

                             

                            James:  Hello Mr. Lawfirm.  I have just won the half billion dollar Mega Millions Lottery.  I would like to stay completely anonymous so I have this proposal.  I would like to sell your firm the ticket for less than face value of the cash amount.  You claim the prize and pay me my share. 

                            Mr. Lawfirm:  Wonderful idea James.  I'll have the paperwork drawn up immediately.  Let's go to lunch!

                            Mr. Lawfirm:  Here are the documents, James.  You sign over the ticket to us.  Our agreed price is $175,000,000 cash.  You stay out of the limelight as the claimant. 

                            James:  Fantastic (as he signs the contract and hands over the ticket).

                            Media:  The winner of the half billion dollar Mega Million lottery jackpot has come forth.  It is Mr. Different.

                            James:  Mr. Lawfirm, you claimed the money, but I haven't received my check.  What's up?

                            Mr. Lawfirm: James, we didn't claim the money.  Your ticket was purchased under our LLC and it immediately resold its interest in the ticket to Mr. Different.  Since that time our LLC company has experienced severe financial difficulties and is in the process of liquidating.

                            James:  But what about our contract?

                            Mr. Lawfirm: Yes, that would be with the LLC.  I'm sorry, but I must run.  I have a plane to catch.  Switzerland is nice this time of year.

                              wander73's avatar - Lottery-038.jpg
                              Philadelphia, PA
                              United States
                              Member #153774
                              March 24, 2014
                              853 Posts
                              Offline
                              Posted: July 7, 2016, 2:48 pm - IP Logged

                              If you don't live in a state that allows anonymity, or you don't trust that you will continue to remain anonymous (i.e., FOIA request), I propose the following strategy.  Please shoot holes in this plan and let me know what I'm forgetting.

                              For Friday's MM drawing I figure that if I wanted to claim the ticket PUBLICLY (I don't), by the time tax time comes NEXT YEAR, I would expect to have about $195,000,000.00.  I arrived at this using the following math. 

                              Lump Sum Gross: $357,700,000.00
                              North Carolina State Tax (5.75%): $20,567,750.00
                              Federal Taxes (39.6%): $141,649,200.00
                              Net: $195,483,050.00

                              Note: This is just an estimate.  I realize that the lottery doesn't withhold this much initially, but it will be around this much come tax time. Also I realize my federal taxes would likely be a bit lower due to deducting part of my state taxes.  But for simplicity, let's just say $195,000,000

                              Now, here is the plan:

                              Priority 1: Maintain Anonymity.
                              Priority 2: Walk away with something close to $195,000,000 (+/- 10%)

                              1. Contact an Estate/Tax attorney (partner) at a huge national law firm.
                              2. "Sell" the law firm (or an individual partner at the law firm) the unclaimed ticket. (or, create a contract to sell the ticket once it's been collected...)
                              3. Have a partner at the Firm redeem the ticket (as if they had won themselves).  They would do the required press conference, and their name would be released to the public.
                              4. Once the money has cleared to the partner's bank account, transfer it to my account (or a trust, etc) as per the contract we had drafted in step 2.
                              5. Once all money has been transferred to the correct accounts, the partner is free to issue their own press release indicating that they had purchased the ticket from a anonymous 3rd party. This would hopefully get the people begging for money off of their backs.

                              What is wrong with this plan? 

                              I realize I'd probably have to pay a lot of money to accomplish this to the Law Firm (how about $5,000,000?) and the Partner themselves for the inconvenience of having their name released (how about $1,000,000?).  But I'm betting that most law firms would take this on for the possibility of having $5,000,000 payday for what I doubt would be a lot of legal work. And I'd be happy to pay ~$6,000,000 (just an estimate) in order to guarantee my anonymity.

                              I also realize that there would be a lot of money "floating around" between the law firm, partner, and my account until tax time of next year, but since my #1 goal is anonymity I don't really care much assuming I eventually get the full amount.  The plan as described would allow be to walk away anonymously with about $189,000,000, which I would be ecstatic about.

                              Side question:  Let's assume that the Law Firm had an office in state that doesn't tax lottery winnings (i.e., FL or TX). Couldn't they have a Partner in that state redeem the ticket without having to pay any state income tax ($20,567,750.00 in my state).  That would let the firm clear a lot more money than if they claimed it in a state such as North Carolina.

                              I wish my dad was alive to see this.  However he wouldn't really have a decent answer.  What he would say is it depends what state the lottery winner is in.

                               

                              I did agree with him on this.  On this site someone mentioned about a past lottery winner and how does anyone know even if it was someone getting the annuity about what the person spends or does with it? 

                               

                              First thing is first you need three people.  The accountant,  lawyer and financial planner.  Then plan accordingly.