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Well I imagine there are different tax consequences - not sure that would eat most of the lump sum.
A serious tax consequence could happen if the lucky winner elects the weekly payout and doesn't live for the full 20 or so years to collect all. The winner is entitled to all the winnings, and the uncollected balance ends up in the winner's estate. Depending on when death occurs, that could be costly.
Estate taxes (when applicable) are due within 9 months of death. So if there is enough "left over", tax could be due even though the money hasn't been collected yet. There have been cases where families were left broke because they couldn't come up with the taxes due.
Of course with higher exemptions now, it could be less painful...
Take the money now, and if you don't trust your heirs, put everything in a trust, etc. (with the help of an experienced estate attorney!). And yes, do consult with an experienced Financial Planner as well (not just someone who does investments).
That may be so, but once you're dead, a will becomes public (unlike a trust).
As a former trust and estates officer pay attention to this ^^^ and as both Elke and I suggested a certified financial planner. The tax consequences question is too dependent upon many other things such as your current tax rate, your current income, etc. Take it now and invest it and you will be fine. Now worry about the fact that you are not gonna be standing at the door receiving a long stem rose bouquet!!!
That may be so, but once you're dead, a will becomes public (unlike a trust).
Follow the discussion. By the time you're dead, you don't have to worry about them killing you for your money. That was what that poster was worried about.
A serious tax consequence could happen if the lucky winner elects the weekly payout and doesn't live for the full 20 or so years to collect all. The winner is entitled to all the winnings, and the uncollected balance ends up in the winner's estate. Depending on when death occurs, that could be costly.
Estate taxes (when applicable) are due within 9 months of death. So if there is enough "left over", tax could be due even though the money hasn't been collected yet. There have been cases where families were left broke because they couldn't come up with the taxes due.
Of course with higher exemptions now, it could be less painful...
Take the money now, and if you don't trust your heirs, put everything in a trust, etc. (with the help of an experienced estate attorney!). And yes, do consult with an experienced Financial Planner as well (not just someone who does investments).
Wow - incredible. Never knew that. Figured once the winner died the payments just stopped and the whole amount never got paid out. But I'd have thought the family would pay the taxes from the winnings if that's the case - don't see how the taxes could be more than the balance of the winnings but you sound like you know your stuff.
Wow - incredible. Never knew that. Figured once the winner died the payments just stopped and the whole amount never got paid out. But I'd have thought the family would pay the taxes from the winnings if that's the case - don't see how the taxes could be more than the balance of the winnings but you sound like you know your stuff.
It doesn't apply if you take the lump sum, only if you take periodic payments over time. If you have say 15 years left to collect and taxes are due now, it could be a problem.
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