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I'd put 50% into a Donor Advised Fund to get the 50% tax break. The DAF would be doled out over time to charities. I would also create separate Irrevocable Trust Funds to pay Friends and Family health related expenses. Most of this would be managed through the various brokerage houses (in various asset classes).
If you had money like that to manage it would become a full time job (even if that is just managing the people that are managing your money).
It's simpler to have less to worry about. So, it's a good thing there is such a teensy tiny fraction of a chance to win.
If the jackpot is large enough, then don't worry about investing. Just put the money into T-bills, CDs, and money market funds and go and relax and live nicely on the interest and maybe a bit if capital draw down.
If the payout is only a few million, at that point you need to worry about how to invest to preserve the capital and still live a nice life. That would be a little trickier. Once they take away half because you want the lump sum and the state and feds take their taxes, there is a surprisingly small amount left to try to get it to support you.
Are you counting T-bills, CDs, and money market funds as "investing?"
At 63, and almost at retirement anyway...added to what I already have, plus Soc. Sec. and my pensions -- I think I could make as "little" as only a few million work and still live a (very) nice life just preserving capital -- inflation or no inflation.
A don't want much, or want for much.
Quote:
Originally Posted by HudsonCoNJ
Just put it all in a Too Big to Fail bank and your money will be safe forever. Or give it to me and I’ll hold it for when you need it.
Uh, yeah.
I never thought they'd let Lehman Bros or Bear Stearns go under, but.....
Just curious. I'm sure there are people who have brainstormed this all out.
Suppose a person just wanted nice passive cash growth. (Stock market, banks, etc.)
Is there a way to keep/manage that large a lumps simply?
No investing in any businesses. No buying any real estate. Both of which would have to be managed.
They don't want 5 houses. They don't want acres of land.
Dozens of accounts dozens of banks with less than 250K in each?
How do they even manage it? Where do they put it?
If the initial lottery payout goes to one bank wouldn't they have to split it up fairly quickly to get under the insurance limits?
The person doesn't want the annuity.
IF they were going to do annuities they should have just taken the lottery'e annuity.
So I'm wondering about someone who takes the lump sum and want to just let the money itself grow.
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If there's any way at all they'd rather take the lump sum...
Or with a billion dollar win is the only way to keep it simple to just go against what they'd rather do......and just take the lottery annuity. ....because .....In the long run THAT is the easiest to manage.
lol - I wonder about this every time buy a lottery ticket. Thank goodness I have relatives that work in finance and would help me - lol.
Agree for a very large jackpot you'd probably want to do the annuity as you'd still be looking at opening a bunch of bank accounts all containing less than $250K. I'm sure large banks have no problem opening that many accounts and making access and management easy. Maybe buy CDs in several of the accounts and keep a few un-invested for spending money. If it were me I'd probably move half of it to a brokerage and invest in an index fund like VTI for additional growth and income. I know it will never happen but it's always fun to dream about.
Annuity invested in US bonds..........payout is for 30 years............no thanks. Can be dicey if you die with 10 yrs of payments left, IRS wants their money next April, they want the lump sum owed on those future payments. 40mm yr X 10 yrs left = 400 million, IRS wants their 40% (First 13mm exempt). So they want 154.8mm next April. Don't have it on hand, now you have to sell the annuity payments to a JG Wentworth type place for 50 cents on the dollar then pay the tax.
Only one SS# per bank will cover the 250K FDIC issue.
Brokerage accounts are protected up to 500K.
Go to the five biggest investment firms in the country. Ask what they would do with 50mm? If you like their answers and agree to their fees then let them handle it.
Jackpot pays about 348mm net after taxes (assuming no state tax).
I've found some ideas about gift taxes and how to handle those.
With a 300 Mill NET windfall, I'd want to give about 50 mill away to family and friends, which of course would trigger gift taxes..... which would almost double that amount.
On one hand with that kind of found money, let Uncle Sam take what he wants and is due. On the other hand IF there's a way to legally mitigate that exposure why not.
For the OP you can tell, I want simple. No giving people up to the gift limit every year. No putting them on a payroll. I'd want to give them their 2 mill and let them go. If they blow it they blow it. The bank is closed
The harder issue for me would be "only" winning the second prize of one million gross. After taxes, and taking care of myself, I wouldn't have anything left to help friends and family and that's something I'd really like to do. Oh well.
I have a group of about 4-5 friends, we're in our late 50s early 60s. The dollar amount we need to be set for life gets smaller every year. With just a half mill NET, they say they'd quit tomorrow. We dream about winning and gifting each other what we need so we could all retire...and be free from the encumbrances of the work world!
Annuity invested in US bonds..........payout is for 30 years............no thanks. Can be dicey if you die with 10 yrs of payments left, IRS wants their money next April, they want the lump sum owed on those future payments. 40mm yr X 10 yrs left = 400 million, IRS wants their 40% (First 13mm exempt). So they want 154.8mm next April. Don't have it on hand, now you have to sell the annuity payments to a JG Wentworth type place for 50 cents on the dollar then pay the tax.
Only one SS# per bank will cover the 250K FDIC issue.
Brokerage accounts are protected up to 500K.
Go to the five biggest investment firms in the country. Ask what they would do with 50mm? If you like their answers and agree to their fees then let them handle it.
Jackpot pays about 348mm net after taxes (assuming no state tax).
You do not have a good grasp of how fdic coverage works
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