KEVIN YOU WANT MYMONEY FREE
"In the U.S., each person can give $11.4 million away, free from the gift tax," which costs a percentage of every dollar above that amount, Glasgow says. When choosing between the annuity or lump sum, you need to decide "whether you trust yourself to manage your affairs on that kind of time basis versus getting it all at once."įor most people, it's also smart to work with trusted financial professionals who will ensure that you're compliant with your state's specific tax laws and help make the money last, Glasgow says.Īnd if you do decide to share your winnings with family or friends, it's important to understand the potential tax limits you could face. "So often you hear stories of lottery winners who so quickly lose this wonderful opportunity that they've been given to have financial freedom because they have either spent too quickly or have been too generous." It's just as important to think about your personal money habits as it is to consider taxes when you come into a large windfall like a lottery win, Glasgow, a partner at McDermott Will & Emery who works with high net worth clients, tells CNBC Make It. "Take time to research the best plan and people to guide your financial decisions with your winnings." Elizabeth Glasgow: You need to decide 'whether you trust yourself' "You want to be able to think through your next steps and be proactive, as opposed to reactive," Torabi says.
KEVIN YOU WANT MYMONEY HOW TO
Keeping things private will help you avoid being bombarded with requests for money or unsolicited advice on how to use your earnings. "Don't announce to strangers or extended friends and family that you've won - at least not right away." "To the extent that you can keep your winnings under wraps, I would," she says. Torabi also advises keeping the news to yourself, if possible. "It will likely be fueled by a lot of adrenaline and influence from friends, family and random wealth managers weighing in."īefore deciding what to do with the cash, you should "take time to reflect with your family on how you would like to make the most of this money to create a more fulfilling life, make an impact and - importantly - make it last."
"For at least a few weeks or a month, abstain from making any money moves with your winnings," she says. When it comes to managing your winnings, don't do anything right away, Farnoosh Torabi, personal finance author and host of the "So Money" podcast, tells CNBC Make It.
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