Last month the U.S. saw the biggest lottery in its history. The winning Powerball numbers were finally called out after over 2 months of drawings. The Powerball winnings topped out at $1.6 billion, crushing the previous lottery record of $656 million.
Since the January 2016 Powerball, three winners have emerged to divvy up the winnings. It’s almost guaranteed that the first question these winners were asked was, “What are you going to do with the money?” Our advice? Get a lawyer.
History has shown that winning the lottery isn’t all fun and games. Many previous winners have faced financial and personal hardships directly linked to their lottery winnings. Receiving a significant amount of money comes with certain responsibilities.
Plan Your Spending Wisely with a Tax Lawyer
It’s common knowledge that lottery winnings must be taxed. But believe it or not, in Europe it’s normal to receive the full winnings of a lottery—tax fee! However, if you win big in the U.S., expect to pay a standard 30% tax on lottery winnings.
Even after initial taxation, no matter what you decide to spend your money on, odds are that you’ll be held accountable for taxes. Whether you give to charity, invest your winnings or give monetary gifts to friends or family, our advice is to seek the advice of a tax lawyer. Make sure you have the funds needed to offset the tax liabilities of your spending.
Prepare Your Family’s Inheritance with an Estate Planning Lawyer
Lottery winners who take home large sums of money are forced to make some difficult choices on how to spend their money now and how to distribute the wealth when they’re gone. A good estate-planning lawyer can help you make proper inheritance decisions. A legally binding and comprehensive will and testament can also help prevent familial strife over inheritance issues.
Protect Yourself from Lawsuits with a Litigation Lawyer
Money certainly has the power to corrupt, and when people find out you’ve won the lottery they may act drastically in order to get piece of your winnings. Distant relatives, neighbors or acquaintances might attempt to blackmail, intimidate or sue you for some of your cash. With the council of a skilled litigation lawyer, you can protect yourself from heinous lawsuits that seek to capitalize on your winnings.
For more legal advice from the Babcock Law Firm, visit our blog and knowledge center.
