Lotteries in the United States are getting bigger and bigger. While the first government lottery happened in 1964, it wasn't until 2016 that any jackpot reached over a billion dollars. In fact, millionaire status seems paltry now that lotteries have been regularly surpassing one billion dollars in prize money. Yes, that is billion with a B. While it is fun to spend your time in rush hour daydreaming about how you would spend that money, would you know what to do if you actually won? Once the excitement wears off and you are ready to cash in that winning ticket, what is your next step?
Why are lotteries so big now?
If you are wondering why lotteries have reached the 'B' status, you aren't alone. While lotteries were once a state-by-state event, many of the larger games are now have multi-state drawings, leading to more participants, a greater influx of cash, and, in turn, a higher prize value. Officials at Mega Millions have recently stated that they "tweaked the prize structure" of the lottery. These changes make it harder to win, but also guarantee larger jackpots. The raw excitement of the larger jackpots drives sales which, in turn, further increases the amount of the overall winnings.
Where do you turn in a winning lottery ticket?
You can't just drive to your local lottery office to cash in your ticket. Depending on where you live, a drive to the main lottery office at the state capital is required. Be sure you bring photo identification, but don't sign the back of your ticket—not yet. Read below to learn about what happened when one women did just that.
Should you take the lump sum payout or choose the annuity?
Regardless of how financially savvy you are, anyone who becomes a millionaire or billionaire overnight needs the advice of a professional wealth adviser. Most lotteries offer an annuity for the full amount that is paid out in equal payments over a set number of years, usually thirty, as well as a 'lump sum payment' option that allows winners to take a reduced amount that is paid immediately. The choice is yours, but most financial planners can help you invest your money to equal or even surpass the dollar amount of the annuity. Plus, you can choose investment vehicles that can be transferred to your spouse, children, or even grandchildren upon your death, whereas many lottery annuities are not transferable.
Can you stay anonymous?
When you become a billionaire overnight, you can probably expect some distant cousins and long-lost friends to suddenly reach out and ask for a loan. In fact, there has been worry about the overall safety of winners. A New Hampshire women won over $559 million dollars and sued the state for her right to anonymity. Lottery officials argued that by signing the back of her ticket she gave away that right, but she won her court case, and her identity has remained a secret.
What should you buy first?
While you may be tempted to buy a new house and several new cars, experts warn to wait. Talk to a wealth management adviser and plan how you can make a billion dollars last for not just for the rest of your life, but that of the rest of your family as well.
While winning a billion-dollar lottery can be life-changing, it is up to you whether that change will be good or bad. Experts say that your best move is to keep quiet and lawyer up. On the bright side, that's one legal bill that you will be able to afford.