Are You Ready to Win the Lottery?
By Jennifer L. Fulton, Esquire
The Law Offices of Robin Bresky
How many of us have participated in a lottery pool at the office? Probably most of us. But what happens if your office pool actually wins big—aside from no one showing up for work the next day? Does your office pool have a plan for if you win? What is the rule in your pool if you didn’t contribute that week? Many of us have heard the stories of the lottery winners who were hounded by “friends” and “relatives,” became the subjects of frivolous lawsuits, and were treated differently by the people that were actually friends and relatives after they won. How will you protect your privacy? Consider the following:
Florida law only allows one person to claim a winning ticket, and requires that certain information on its lottery winners are public information. What does this mean for a lottery winner? It means you should have a plan before you cash in your winning ticket. Even better, have some portion of the plan before you buy your ticket.
Before buying your ticket:
- If you are in an office pool or are planning to share your lottery winnings with another person, having a written agreement about how you intend to share the winnings protects all of you.
- Agree in advance not to tell others that you have won. Once that information is out, there is no such thing as putting the toothpaste back in the tube.
- Agree in advance to collect the winnings though an LLC or a trust prepared by an estate planning attorney.
Once you check your ticket and find you are the lucky winner:
- Find an estate planning attorney who can create an LLC or trust for the lottery winners.
- You should also have a financial planner and accountant.
- The trust or LLC name should not have any identifying information about the beneficiaries.
- The trust or LLC allows more than one person to benefit from the winning ticket without negative gift tax consequences.
- The trustee of the trust or manager of the LLC can turn in the ticket and collect the winnings on behalf of the lottery winners, who stay anonymous.
Once you and your office mates have set up the lottery trust or LLC, consider setting up your family’s trust or LLC to receive your share of the winnings, so you:
- Learn to manage your newly acquired wealth;
- Keep your new purchases out of your personal names;
- Protect your children from receiving too much wealth at once, before learning the value of work, and limiting the dissipation of assets due to divorce, substance abuse, or creditor claims;
- If charitably inclined, you can defer and minimize income tax while providing an income stream to your beneficiaries through charitable gift planning.
So next time you play the numbers, don’t play roulette with your privacy. Be prepared and protect yourself and your loved ones before you claim your ticket!
Jennifer L. Fulton, Esq. is an attorney at The Law Offices of Robin Bresky (www.breskylegal.com) focusing on Estate Planning, Probate, and Estate and Trust Administration. A member of the Florida Bar since 1996 with a Juris Doctor degree from Nova Southeastern University, Fulton works with clients to plan for the milestones of life (college, “adulting”, marriage, children, grandchildren, aging parents, pre- and post-divorce, loss of a spouse, aging, diminished mental capacity) and administration upon death. She can be reached at 561-994-6273 or EstatePlanning@BreskyLegal.com.