Getting in on the lottery can be great fun, especially if you find yourself the lucky winner of a substantial amount of money. While you’ve been daydreaming about what you would do with that money, have you considered how to split lottery winnings with family or co-workers?
You do want to share, right?Okay, okay, so the answer is maybe, but maybe not.Some critical considerations exist when splitting lottery winnings with family, friends or co-workers.
But, first things first...
Can you split lottery winnings with family?
Yes! You can share money with your family after a big lottery win. But there are some essential points to consider:
Decide whether you want to share: This is a personal decision only you can make, and there’s nothing wrong with keeping your winnings. But if you want to spread the wealth, that’s good too.
Get advice: Get the advice of a professional, such as an estate lawyer or a financial planner, before you start handing out the cash. They can help you understand tax implications, legal issues and other factors related to your gifts.
Know your taxes: Those same professionals (along with a certified public accountant) can help you understand what taxes you will pay so you can set aside enough money for tax time and don’t have to deal with a surprise tax bill.
Decide how to share: Will everyone get an equal share? Will those with more financial need get a bigger chunk of the pie? Or will you use some other factor to decide who gets how much? However you break it down, clearly communicate your reasoning.
Write it down: When you make your decision about who gets what, put it in writing. (Yes, you may need to get a lawyer involved.) This will help avoid potential problems later.
Think about trusts or annuities: If you don’t want family members to squander the money immediately, consider placing it in a trust or annuity for each member. This will release the cash at a predictable rate and ensure the money lasts.
Be a great communicator: Be open and honest with the people you gift money to about how much and why. Be able to explain your reasoning to avoid misunderstandings and resentments in the future.
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Introduction: My name is Amb. Frankie Simonis, I am a hilarious, enchanting, energetic, cooperative, innocent, cute, joyous person who loves writing and wants to share my knowledge and understanding with you.
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