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There’s also a new way to purchase official lottery tickets online
SHOULD they win big, a lottery expert has urged players to keep several considerations in mind.
The process of obtaining money from games like Powerball or Mega Millions can be complex and have downsides without caution.
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Of course, it’s highly unlikely to land millions of dollars from the lottery.
Current odds of landing a Powerball jackpot are around one in 292.2 million, and for Mega Millions, it’s even more unlikely at one in 302.6 million.
Still, it happens all the time to unsuspecting Americans, who suddenly come into life-changing sums and must figure out how to handle the financial situation they find themselves in.
First, they must realize that they’ve won, and many don’t for some time.
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Along with regular announcements and press releases to help make unknown winners aware, state lotteries also have a window for them to come forward before the cash is forfeited entirely.
Those windows vary by state and can 180 days to up to a year at most, and Akshay Khanna, CEO of Jackpot.com, told The U.S. Sun that there are several reasons for that.
Jackpot.com was founded in 2017 and operates as an online lottery platform that lets Americans purchase tickets from their devices remotely and securely.
Khanna explained that the lengthy claim windows are “primarily for accounting and budgeting purposes” for lottery officials.
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That way, if a player doesn’t end up coming forward, the state can quickly redistribute the money, whether that’s back into lottery games or in it’s general fund for programs to benefit residents.
“Having a deadline allows lottery organizations to finalize their records and allocate unclaimed prizes elsewhere,” he said.
Not only that, but officials figure there’s a slim chance the winner would claim it after 365 days if they hadn’t already.
“Ultimately, if a prize is unclaimed after a year, it’s very unlikely that a winner would ever come forward,” Khanna noted.
For many players, it still does take them a long time to come forward and claim their prize, even if they knew they’d won right away.
Khanna told The U.S. Sun this can happen because the players “simply don’t realize that they’ve won.”
Some states have differing deadlines for when lottery players can claim prizes. Most allow a 180-day or one-year window before tickets expire and the money is forfeited. Below are the 180-day states:
Credit: Jackpocket
He explained that one of Jackpot.com’s biggest advantages for players is that it notifies customers that it was there ticket that won big, so there’s virtually no way they could miss it.
The platform then helps “store their ticket securely until they chose to claim it.”
Otherwise, the long claim time is typically a direct result of the players taking smart steps to connect with “financial advisors, tax professionals, and lawyers” beforehand.
“Winners typically want to have a plan for the money prior to claiming,” Khanna said.
“Oftentimes they will create trusts or other legal entities to handle the money for tax or anonymity purposes.”
The CEO emphasized that the best tip he can offer players is to “consult with financial advisors, tax professionals, and lawyers prior to making any decisions.”
Professionals will also advise the players on what the best option to collect the funds are for them — a lump sum distribution or annuity payments.
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
Debate over which option is better has been going on for some time between lottery experts and lawyers.
Khanna said the annuity “guarantees wealth” with the consistent payments every year and less of a tax implication.
Even so, the CEO admitted that the lump sum “offers higher expected returns over the long term” with the right steps.
No matter what, every decision comes down to the lucky winner.
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Someone recently had their fortune change considerably after landing the $1.22 billion Mega Millions jackpot, and the ticket was purchased in California.
Another Mega Millions prize worth $1 million is also remains unclaimed in Florida as officials search for the anonymous winner.
Remember to gamble responsibly
A responsible gambler is someone who:
For help with a gambling problem, call the National Gambling Helpline on 1-800-522-4700 or go to ncpgambling.org/chat
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