There are many legal issues you’ll face if you win the lottery. This is why it’s vital for you to consult with an estate planning attorney prior to claiming your lottery winnings. Doing so allows you to professionally address these issues so that you can enjoy your luck instead of having it ruin your life.
When properly addressed, your winnings can be a great opportunity for you to revisit your estate planning situation. Sometimes you may even be able to take care of your wills, living wills, and powers of attorney by yourself. However, since laws vary depending on the state you live in, it’s easy for your situation to get complicated quickly. Therefore, it may be better for you to consult with an attorney for individualized attention regarding your situation.
Privacy and the Identity of Lottery Winners
The media typically publishes the names of all lottery winners. This means you’ll lose any privacy that you enjoyed previously. While some people say that this is important for assuring players that the state isn’t keeping the money, others say celebrity status negatively impacts winners’ lives. Sometimes you can protect your privacy, though. For instance, an attorney may be able to help you create a legal entity so that your identity remains hidden.
Paying Taxes on Your Lottery Winnings
According to the law, your winnings are considered taxable income regardless of whether you receive a lump-sum payment or multiple annual payments. You’ll pay taxes as you receive the money. However, an estate planning attorney can help you avoid probate and minimize estate taxes for your beneficiaries by establishing a trust for holdingyour lottery winnings.
Splitting the Money Won in the Lottery
There are a lot of families, friends, and colleagues who will form a pool to buy lottery tickets together.Estate planning attorneys say that there are a few things you should know about splitting the winnings if you do this.First, you need to ask yourself: Did you enter into a verbal agreement to share your lottery winnings with another person? If so, can this be enforced by applicable state laws? (Beware that some states prohibit contracts for gambling.)
Sharing Winnings with Your Spouse / Significant Other
Estate planning attorneys will tell you that any money won in the lottery is considered marital property, especially if you used marital funds to buy the ticket. Therefore, if you get divorced, they must be legally divided, which is why you should talk to an attorney if a divorce is pending. There may still be joint rights to the winnings even if you aren’t married. This will occur if you both live together and share living expenses.
Get Professional Protection for Your Lottery Winnings
When you win the lottery, you’ll want to consult with our highly experiencedtax estate planning attorneys at Blenner Legal Group in Palm Harbor, FL. Doing so is quite advantageous since you’ll encounter numerous legal concerns. Ideally, you should consult us prior to claiming your prize so that the appropriate legal mechanisms are put in place.