It’s everyone’s dream to win the lottery. Suddenly inheriting such a large sum of money can really put you ahead and ensures you never have to struggle. So why do so many winners choose to stay anonymous?
A lot about your life can change literally overnight. From your regular budget to your taxes, anyone who acquires a large sum of money will have to make a lot of changes. Along with financial changes, your social life can dramatically change.
The first thing any lottery winner, or anyone who acquires a substantial inheritance, should do is call their accountant and call a lawyer. Here are five reasons why lottery winners will need a lawyer.
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You’ll want to protect all your new assets
Even getting the smallest winning jackpot changes your life. You’ll want to invest your money and find ways to support the ones you love. But many lottery winners experience old friends, estranged family members, and even strangers suddenly walking into their lives expecting handouts.
Many winners choose to stay anonymous because other people might feel entitled to their money. People have a tendency to act selfishly when money is involved, even if they have no legal grounds for it. Having a lawyer on your side in case someone sues you will help protect you before trouble begins.
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Your taxes will change drastically
Since your total gross income for the year has significantly changed, you will have to start paying your taxes differently. For this, you’ll need both an accountant and a lawyer. An accountant ensures all your money is properly dispersed, while your lawyer ensures you keep as much money as possible.
Many lottery winners end up losing a significant amount of their winnings from taxes alone. Your lawyer can also advise you on how to make your winnings last longer, so you get more out of it.
You might need to stay anonymous to protect yourself
In 2015, lottery winner Craigory Burch Jr. received $434,272 in a Georgia jackpot. Because his state doesn’t have strong anonymity laws, many heard about his winnings. Within months, Burch was killed by seven masked robbers.
It’s a safety concern for many, as others who feel entitled to the winnings might become hostile or violent, even over smaller winning jackpots like Burch’s. This is why a lot of winners choose to stay anonymous. As of right now, only the only states that allow lottery winners to remain anonymous are:
- North Dakota
- South Carolina
Winners in states like Arizona, Georgia, and Virginia need over a certain amount to stay anonymous. However, in states like California, lottery winners must reveal their identities. This can cause a lot of safety issues for winners and many winners have to sue their state if they’re having anxieties about revealing themselves.
Lottery winners are more likely to declare bankruptcy
Getting a large sum of money is exciting, especially if you’ve never had a lot of it before. However, lottery winners often lose track of their money and end up filing for bankruptcy. This is why lottery winners will need both an accountant and a lawyer. Your accountant keeps track of all your money and tells you how to invest it properly. Whereas your lawyer can tell you what you legally can and can’t do with your money.
Similarly to a business lawyer, your lawyer wouldn’t necessarily tell you what to do with your money, only the most legal ways to spend it.
You’ll want to decide on a power of attorney
It’s a little bleak to think about what might happen if you die, but with a substantial amount of equity, you’ll want to make sure it goes to all the right people. A lawyer can help you draft a will and can ensure your money is allocated to all the right people.
Winning the lottery is literally a one-in-a-million opportunity that can change your life. Lottery winners should protect themselves from the legal ramifications that money can bring.
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