The Powerball lottery jackpot has climbed up once again ahead of Wednesday night’s drawing, and experts are giving their two cents on what a winner should do with the money at this point. Due to strong ticket sales from Tuesday into Wednesday, the jackpot jumped from $610 to $630 on Wednesday. That’s the seventh-biggest prize in the game’s history, according to a report by CNBC.
Seeing their number come up on the Powerball lottery reading would be a dream come true for most people, but most probably haven’t given much thought to what they would do in the minutes and hours immediately afterward. Certified financial planner Joe Buhrmann explained to CNBC that a lottery ticket is legally considered a “bearer instrument,” meaning whoever holds it is considered its owner, and the winner of the prizer. This means that you need to protect the ticket from loss, damage and theft in the time it takes you to claim your prize.
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Buhrmann said that the very first thing to do is take a picture of yourself with your ticket so that you have some verification that you had it. He even suggests signing the back of the ticket to claim ownership, although he warns that in some states, this would mean you could no longer remain anonymous. After that, he said to put the ticket somewhere safe until you can claim your prize – perhaps a safety deposit box.
Buhrmann says that a winner of a major jackpot like this one should assemble a team of advisers before claiming their prize, including an attorney, a financial advisor, a tax advisor and an insurance professional. They can help determine whether the winnings would serve better as a lump sum or in the form of 30 payments over 29 years.
In this case, a $630 million Powerball prize would amount to $448.4 million in a single cash payment. However, that would be subject to a 24 percent federal tax withholding, which comes to $107.6 million. That leaves $340.8 million, which would then be subject to state taxes in some places.
As mentioned above, some states do not allow winners to claim their prizes anonymously. If that’s the case, Buhrmann warns that winners will immediately become the target of many scammers. He said: “You may have been friendless and unknown to passers-by on the streets. That will all change when you’re announced as the winner.” The upshot, however, is that in that case there’s no reason not to share the good news with all your friends and family.
The Powerball numbers will be drawn again at 11:59 p.m. ET on Wednesday – check your local listings to watch live. If a winner is not found this time, the next drawing will be on Friday night at the same time.
