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So you’ve been faithfully trying the Powerball lottery, and finally struck gold.

Congratulations! The odds seemed to be an impossible dream for you to win a mega drawing.

Assuming you did. Now what?

There are financial precautions you should take.

Yep, be smart about it. Unless you plan carefully, your mega windfall will result in a nightmare.

Tips include:

1. Deliberate in your decision-making

Resolve to be analytical in how you handle your winnings. There’s a lot to think about.

2. Don’t forget about income taxes

Multimillion dollars in winnings, means you two things. 1. You’ll have to pay taxes. 2. You’ll be in the highest federal tax bracket – 39.6 percent.

Not only that, unless you’re in a state like Washington where there are no income taxes you’ll be hit with a state income tax bill.

Worse, if you buy your ticket outside your home state, you’ll be hit with taxes for both states.

3. Taking a lump sum

Decide what’s best – taking a lump sum or a payment over 20 years. For many people, it’s best to take the money in a lump sum. This will mean your money will earn more interest.

Be aware you’ll have to pay a significant amount in taxes upfront.

However, if you invest wisely you’ll have more money in 20 years than if you accepted 20 annual installments.

“We’ve all heard stories of lottery winners, rock stars, heirs and heiresses, and professional athletes becoming millionaire morons who wake up rich but are broke by nightfall.”

-Robert Kiyosaki

4. Go for installments, if you plan to spend the money right away

It’s true, you’ll be better off in the long run if you take the amount in-full. However, if you have plans to spend the money, go the installment route.

But spread it out over the years.

5. Suppose you die unexpectedly, know what happens

If you die, the winnings can be passed to your spouse without being taxed. However, if you’re unmarried and depending where you live, your heirs will face estate taxes probably for more than 40 percent.

From the Coach’s Corner, more advice on finance:

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Protect Your Bank Accounts So You Can Sleep at Night — Imagine for a moment — you’re sitting at your desk enjoying a second cup of morning coffee. Then, your phone rings. It’s a call from your bank to discuss possible fraud. Your bank is concerned about possible suspicious activity with your accounts, and wants to make sure you’re not a victim.

9 Secrets for Success in Real Estate Investing — Whether you want to work with investor partners or go solo, real estate investing can be a profitable business. By performing due diligence, developing a system and working hard, real estate investing works.

Tax Deductions for Small-Residential Property Landlords — As investments go, small residential property landlords enjoy the most tax benefits. In a down year, rental property tax deductions can make a big difference whether you enjoy profits or suffer losses.

Financial Tips for Taking the Plunge to Buy a Business — So you’ve decided to take the plunge in buying a business. Congratulations. I salute such bravery. Owning a business represents one of America’s great fundamentals — our free-enterprise system.
You’ll have multiple financing options.

Even Ordinary Folks Need 10 Best Strategies for Estate Planning — Updated March 27, 2015 It’s a mistake to think estate taxes only apply to the super rich. Estate taxes hurt ordinary folks. Estate taxes are especially problematic for farmers and small businesspeople, alike, who own their buildings and have capital tied up in equipment to grow crops or to produce products.

“My wife said to me: ‘If you won the lottery, would you still love me?’ I said: ‘Of course I would. I’d miss you, but I’d still love you.’”

-Frank Carson


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.