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What to do after you hit the Mega Millions jackpot

Posted March 28, 2012
Updated March 29, 2012

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— There's a half-billion-dollar multistate lottery jackpot up for grabs and plenty of folks here in the Triangle are fantasizing how they would spend the money.

The Mega Millions drawing of the nation's largest-ever lottery jackpot is Friday. Van Denton, a spokesman for the North Carolina Education Lottery, said the jackpot might even be a world record.

People buying lottery tickets at the C-Mini Mart on Poole Road in Raleigh Wednesday didn't have to think too long about what they would do with the money.

"(I'd buy a) a marvelous house with a paradise backyard," said Roshad Raines. "Can you picture that? I can picture that right now with these tickets."

Brian Williams would put his riches toward new gold clubs. Angie Collie wants "gigantic houses with multi-million dollar pools."

But you're the one who gets really, really, really lucky this week, protecting your riches, your identity and your sanity will require some careful thought and planning.

Hitting Mega Millions jackpot could be life-changing Hitting Mega Millions jackpot could be life-changing

"A half-billion-dollar jackpot is really a life-changing event," Denton said. "Maybe go away somewhere nice for a month and let things die down."

Here's some advice for whoever strikes it rich – Mega Millions rich, that is:

Q: What do I do with the ticket?

A: Before anything else, sign the back of the ticket. That will stop anyone else from claiming your riches if you happen drop it while you're jumping up and down. Then make a photocopy and lock it in a safe. At the very least, keep it where you know it's protected. A Rhode Island woman who won a $336 million Powerball jackpot in February hid the ticket in her Bible before going out to breakfast.

Q: What next?

A: Relax; breathe; take time to think about your next move. Don't do anything you'll regret for the next 30 years, like calling your best friend or every one of your aunts, uncles and cousins. It doesn't take long to be overwhelmed by long-lost friends, charities and churches wanting to share your good fortune. You've waited a lifetime to hit the jackpot; you can wait a few days before going on a spending spree.

Q: So whom should I tell first?

A: Contacting a lawyer and a financial planner would be a lot wiser than updating your Facebook status. Make sure it's someone you can trust and, it's hoped, dealt with before. If you don't have anyone in mind, ask a close family member or friend. Oklahoma City attorney Richard Craig, whose firm has represented a handful of lottery winners, says it's essential to assemble a team of financial managers, tax experts, accountants and bankers.

Q: Remind me, how much did I win?

A: As it stands now, the Mega Millions will pay out a lump sum of $359 million before taxes. The annual payments over 26 years will amount to just over $19 million before taxes.

Q: How much will I pay in taxes?

A: This partly depends on where you live. Federal tax is 25 percent; then there's your state income tax. In Ohio, for example, that's another 6 percent. And you might need to pay a city tax depending on the local tax rules. So count on about a third of your winnings going to the government.

Q: Should I take the cash payout or annual payments?

A: This is the big question, and most people think taking the lump sum is the smart move. That's not always the case. First, spreading the payments out protects you from becoming the latest lottery winner who's lost all their money. Don McNay, author of the book "Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery," says nine out of 10 winners go through their money in five years or less. "It's too much, too fast," he says. "Nobody is around them putting the brakes on the situation."

Q: But what if I'm good at managing the money?

A: Invested properly, the lump sum option can be a good choice. There's more planning that you can use to reduce estate taxes and other financial incentives. Others, though, say that with annual payments, you are taxed on the money only as it comes in, so that will put you in a lower tax bracket rather than taking a big hit on getting a lump sum. And you still can shelter the money in tax-free investments and take advantage of tax law changes over the years.

Q: Should I try to shield my identity?

A: Absolutely. This will protect you from people who want you to invest in their business scheme or those who need cash in an emergency. Lottery winners are besieged by dozens of people and charities looking for help. "There are people who do that for a living. Unless you understand that, you can become a victim very quickly," says Steve Thornton, an attorney in Bowling Green, Ky., who has represented two jackpot winners.

Q: So how can I protect myself?

A: Again, it somewhat depends on where you live. In Ohio, you can form a trust to manage the money and keep your winnings a secret. In other states, you can form a trust but still be discovered through public records. And a few states require you to show up and receive your oversized check in front of a bunch of cameras, making it impossible to stay anonymous. Thornton set up a corporation in the late 1990s to protect the identity of a client in Kentucky who won $11 million. "No one had done this before, and there were legal questions about whether a corporation can win," he says. "We were able to hide their names."

Q: Is it OK to splurge a little?

A: Sure, it's why you bought a ticket, right? "Get it out of your system, but don't go overboard," McNay says. But remember that if there's a new Mercedes-Benz in the driveway, your neighbors will probably be able to figure out who won the jackpot.

Q: How much should I help my family and others?

A: It's certainly a natural desire to help relatives in need and take care of future generation. But use extreme caution when giving out your money. Jack Whittaker, a West Virginia contractor who won a nearly $315 million Powerball jackpot in 2002, quickly fell victim to scandals, lawsuits and personal setbacks. His foundation spent $23 million building two churches, and he's been involved in hundreds of legal actions. "If you win, just don't give any money away, because the more money you give away, the more they want you to give. And once you start giving it away, everybody will label you an easy touch and be right there after you. And that includes everybody," Whittaker said five years ago.


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  • common tater Mar 29, 2012

    Don't give any away? I'd rather do some good and be broke in 5 years, than do nothing for anyone and die rich. I like to think I'd put 80% in a charitable trust (Bill Gates style)...I can live like a king on 20% of that jackpot. Give every family member a million? I'm on the fence on that can feed a lot of addictions... and you might be the cause of several divorces and unwise career decisions.

  • jdo823 Mar 29, 2012

    I would booked DisneyWorld for a day and having a private party with all of my relatives and friends ..... and all the Playboy's Bunnies!

  • pappybigtuna1 Mar 29, 2012

    Move out of NC, no more NC taxes. Create a form email letter, thanking people for trying to contact me, but the answer is NO on getting any of my money.

    Any charities would have to fit, exactly within my beliefs and who gets their money.

    Get nice home & workshop, dig a mot 15 ft deep, with barbed wire around it, and fill it with aligators, crocodile's and sharks. And have one big steak & lobster

  • mojo nailing rb Mar 29, 2012

    I would buy a new truck with a sleeper so I did not have to sleep in the box truck like I do now.

  • awood2 Mar 29, 2012

    after my partying is over..I would give to charity then, give back to my parents, help my siblings out, and fix my house up some or build a new one. not bigger mind you! (more to clean) buy newer vehicles etc...these are my dreams!

  • awood2 Mar 29, 2012

    When you turn your ticket in, do you have the option to keep your name anonymous from the public? I would think that lottery commission would give you the option if you want to go public with it or not.

    I would hope so. Because if not, you would have friends you didn't even know you had!

  • awood2 Mar 29, 2012

    thank god and PARTY!!!

  • not my real name Mar 29, 2012

    I would be so far off the grid so fast nobody would see anything but the dust settling. Oh wait, that happens when I go home everyday already. So I'd likely just travel around the world with my family and hand pick a few good charities to give to.

  • beachblues1 Mar 29, 2012

    I would disappear on an extended cruise around the world so people could not find me. Invest the proceeds in utility stocks where they yield a 5% dividend that is taxed at 15% and let most of the dividends buy additional shares. Every quarter that dividend rolls in the BIG $$.

  • wmb95013 Mar 29, 2012

    i think i would buy the world a coke!