Posted on 04/02/2012 8:30:50 AM PDT by rawhide
Employees at a McDonald’s in Maryland are outraged at a co-worker who claims she won $105million in Mega Millions which she is not planning on sharing - despite the fact they had pooled their money for tickets.
Workers at the fast food outlet bought a number of tickets together for the biggest lottery in world history but Wilson claims she separately bought one of the three tickets nationwide that will split a record $656 million payout.
'We had a group plan, but I went and played by myself. [The ‘winning’ ticket] wasn’t on the group plan,' Wilson told The New York Post.
The group’s tickets —along with a list of those who contributed to the pool — were left in an office safe at the fast food outlet..
Then, late Friday, before the night’s drawing, the owner of the McDonald’s, gave Wilson $5 to buy more tickets for the pool on her way home from work, and she went back to the 7-Eleven and bought them.
Wilson took those tickets home with her.
According to the Post, when she found out she had the winning ticket, she called coworkers and told them she - rather than they - had won.
'I won! I won!' she told a colleague.
'She said, "Turn on the news". She said she had won.
A man identifying himself as (Allen), the boyfriend of a McDonald’s manager named Layla, then went to Wilson's home to question her about the winning ticket. Though she first refused to come out, they banged on her door for 20 minutes until she finally relented.
'These people are going to kill you. It’s not worth your life!' Allen said he told her.
'All right! All right! I’ll share, but I can’t find the ticket right now,' she said, according to Allen.
(Excerpt) Read more at dailymail.co.uk ...
it seems better to take annuity payments, if allowed, rather than a lump sum. Defers the taxes into the future, allowing a bigger after-tax return.
But everyone now takes the lump, the argument being more control of funds.
All tickets are time stamped as to the sale. If the ticket was bought in a group with 4 other tickets shortly after the manager gave her the 5 dollars, this woman is toast.
If the woman bought a ticket time stamped before the manager gave her the money, she gets it all.
All the rest of the pool tickets were in the office safe.
We have an office pool, but the tickets are photocopied and posted in the office. If one of the two folks who usually buy the tickets wins separately, the winner won’t be among the photocopies.
LOL!
That may have been the testimony but it's not exactly true. It's only a winner after the ticket itself has been verified, and after it's been established that the claimant has complied with lottery rules. Ask the smarmy New York lawyer who tried to claim the Hot Lotto jackpot in Iowa!
1. You’ve changed your phone number.
2. Hired a lawyer.
3. Get a P.O. Box to serve as your official address.
4. If you plan any major life change (a wedding, quit your job, etc.), do it BEFORE you turn in your winning ticket.
I remember reading about a guy who filed for divorce after he won the lottery, but before he submitted the ticket. He kept his wife in the dark about winning the lottery. She found out after the divorce, sued and won half the money. Good for her!
This is going to court, that is for sure.
And gotten out of town.:)
I would take the lump sum and then work with a tax accountant to lower possible taxes.
I don’t trust the state enough to pay me out over 20 years. If I could trust the state, I would probably take the annuity.
Most financial advisors I found online seem to suggest the annuity option is far better than taking the lump sum option, if the payout is $10 million and above. Just google ‘lottery winnings annuity vs lump sum’ and you will see their reasoning. The are other factors to consider, I’m sure.
You forgot..
* Holiday plans probably in an Island somewhere, leave before the lawyers get the ticket...
* A PO Box..
* Have said Lawyer set up a Trust, where the trust gets the money and you remain anonymous behind as a beneficiary.
Yes it has been done. A while back an attorney ( or was it a team ) picked up the winnings in for "the Trust"....
She’ll get sued and lose.. why folks do this is beyond me.
I know enough that, objectively speaking, that taking the annuity would be the better option for several reasons, including the fact it’s to lower the taxes on a 4 million dollar annual payout and the fact that receiving an annual cheque prevents one from blowing the whole thing and losing it all.
However, that is all dependent upon a state’s willingness and ability to send you an annuity. Unfortunately, we live in interesting times and many states are now hard-pressed to pay their bills and some states are beginning to contemplate the possibility of unilaterally ripping up all sorts of agreements to stay financially viable.
Id rather have my annuity be part of the resetting process of state finances.
So, I’d rather take the payout and find somebody qualified to set up my own annuity, rather than take a chance on the state.
One of the rational's given is that you can only mess up `1/26th of it a year, or whatever their annuitization time frame is.
If I won? Set up a Trust to deposit the winnings in, and behind it, I'd assemble a team of pro's and take the lump sum and go the venture capital / private placement route. Their are a lot of great ideas out their that need Capital. Just one could be a positive tipping point for our nation if it is a paradigm changer. To be part of it ( a big part i.e. the funding ) ? Priceless....
“..so Ralph got to keep all the weekly proceeds..”
Although he had to probably pay more taxes on his gambling proceeds, he saved on worker’s comp and S.S.!
I would take it in lump sum and put about 20 percent of it in up grades to my property outside of town.
Upgrades would include a reworking of the large creek. (I would build myself a very efficient water wheel as well as a nice deep pond.)
I'd also construct a moat and bailey system replete with 25ft high walls around my complex. Drill several wells, And construct underground storage for several years supply of food and ammo for me and my relatives. Above ground would have reinforced structures to house me and close family and friends as well as live stock. Also a very large truck garden and tools to keep it all in good repair!
No, I am not kidding.
..........................Although he had to probably pay more taxes.................
Nope, the full payments were in cash, so he never declared the extra revenue, only what was on his paycheck W-2
there just ain’t no way to lower the taxes on a lump sum.
some question on here whether you can move to TX NH or FL before cashing the ticket. not sure what the answer is on that ... to avoid state income tax.
Fundamentally speaking, a cashable cheque in the hand is better than promises made over 20 years that may not be kept.
I would let the tax accountant figure out the strategies of lowering my tax bill, though, I suspect, when I accept the prize, the taxes are prepaid, off the top. I can’t see the governments involved taking a chance of me volunteering to pay the millions of taxes, when I could potentially be in Barbados or something.
Yes, one of those strategies, if legal, would be to figure out the best place to claim the prize.
“...the full payments were in cash...”
So? I’m sure he still paid taxes on it. Just like my barber does when I give him a $20 bill for a $12 haircut. ;)
That thing with the paycheck reminds me of the John Wayne flick where Dean Martin goes in for a drink and raffles off his glass eye. 25 cents for a chance. Then whines about having to wear a patch and can he buy his eye back from the winner for $1. Then shows that he can see in both eyes and everyone gets a laugh. And he buys a round on the house.
I’m doubting this McD gal will have any such story. I feel sad for her 9 kids. It isn’t going to end well. Heck, even in the best of homes, who knows what that sudden wealth will do to someone. And even if mom and dad can manage things well, the kids could get messed up either being spoiled, or thinking that their parents should be spending more on them.
Of course I wouldn’t mind giving it a try!
I think you have it backwards.
i cannot concede that a strategy is a strategy if no such strategy exists.
Not aware of any law requiring the taxes for a 2012 winning be paid before April 2013. Do not know why taxes are taken out of the prize as the law does not seem to require it.
Even if you renounced yer citizenship and went somewhere ... doing an electronic transfer out of the country ain’t all that simple. Never tried it.
Maybe some day, I go to Belize.
PS ain’t nothing no accountant can do about ordinary income once it is incurred. There is no more 10-year averaging. gone 20 years ago.
All bonds are “promises made over x years that may not be kept.” And stocks are a claim on future earnings that may not occur.
I can only speak about my jurisdiction.
I have talked to my lotto sales rep about such things. It may be possible, once my right to the money has been positively established, to have the money made out to a corporation. Under Canadian law, corporations can pay out the taxes over a 5 year period.
If this is the case, I could establish a corporation prior to picking up the cheque, have the cheque made out to my corporate’s name, and then pay out the taxes over 5 years using whatever strateies I could to lower the tax burden.
Even if it only ends up saving my a paltry amount, like hundreds of thousands of dollars, it’s still hundreds of thousands of dollars. :)
..................It isn’t going to end well. Heck, even in the best of homes, who knows what that sudden wealth will do to someone....................
I classify that situation as a high class problem!
I think that I could deal with it.
Although it looks like big profile sports figures have a real diffficult problem saying NO to all the hangers on.
The top prize this week was $213,333,333.33 (because there were three winners splitting $640 million). Is that the expected winnings after taxes from a $213 million win?
You only get the entire $640 million, minus taxes, if you’re willing to be paid out over the next 20 years. If you take the lump sum, you get considerably less.
Yeah, since the $640 million was split three ways, I suppose that the $105 million could be the amount after taxes for winning the $213 million won by each of the three. (I think I could get by on that.)
$213 million, after taxes, is about $149 million, because you pay about 30% taxes to the state and feds.
The $105 million (I do believe that’s before taxes as well, so expect a cheque of “only” $70 million) is probably the base amount that gets paid out. If you are willing to wait out the entire 20 year period, then the money gets invested by the state to which then you’d receive an annuity. By the time the state has paid you out, because of the interest made, you’d be entititled to the entire $213 million, subtract taxes.
the IRR (interest) on the 20 x $10.65 m payments is 9.15%.
So the lump sum would have to earn 9.15% after tax to equal the value of the payments.
I am assuming 20 equal pmts received at the beginning of the year. The 9% seems outrageously high ... meaning the lump sum given is much too low. Either:
a. the imformation is wrong
b. or taking the lump sum is dumb.
N=20, beginning of year ... so final pmt is 19 years from now.
Pmt= -10.65 million
NPV = 105 million
Interest Rate = 9.15%
I agree, that in another time, taking the lump sum would’t make sense. Especially, with the annuity, you could make mistakes for the first couple of years without worrying because you’d have another cheque coming.
But since I have absolutely no faith in most states being financially solvent, with their pension payouts or infrastructure, I’d rather have the bird in the hand than a promise in the bush.
I don’t want to line up as a creditor at any point in time.
I think I could live almost as well on $105 million (subtract taxes) than I could on $213 million (minus taxes).
the current federal rate on $105m is 35%
most states 5 or 6% ... combined 40% or so.
And the feds have a nice claim of 40% estate tax on what is left. And ya cannot give it away .... unless you move some to a charitable trust ... no longer your asset then.
The smart move for an elderly person is try to have your grandchildren cash it in ... but I do think minors can be owners. This might be challenged saying that you are the owner and you GIFTED it to your grandchildren .... not sure what the law says.
That’s why I was thinking, if I ever won the lottery, to have it paid out to a corporation, so I would only pay the corporate level of taxation.
I’d be the sole shareholder, since I don’t have family. But if I did have family, they’d have enough shares so that their income would be tax-free.
I know a guy who does this. He’s a plumber and his company is incorporated. His family are shareholders and they have enough shares so that each kid and wife get the maximum amount of income, but remain tax free. Consequently, instead of being taxed at an income of $100,000, he’s only taxed at $60,000.
I think that I’d be dumb enough to settle for $105 million up front. At that point, I don’t think I’d be too concerned about the difference. :=)
if what you say is true, then municipal bonds would have to pay 12% to be sold on the secondary markets ... and their yield is less than corporates ... which means munis are seen as safer than corporate bonds and stocks.
the solution is to short the muni market or buy puts on something like a muni ETF.
The loss you are concerned about is not seen as real by the markets and if you think it is you can buy ‘insurance’ real cheap cuz the markets are underpricing the ‘insurance’.
Never give your money to a friend to go bet at the casino!!!
Your bet will always lose and the friends will win!!!
well Bob. It sounds like you would want the money invested at a very low rate. What would you do with it once you got it? You’d hafta loan it out somewhere.
in the US, it is usually better to file jointly, so it don’t matter if you give income to your wife or yourself. And kids get a break on the first 1900 of income, so he must have about 20 kids.
on the annuity question, you could sell the 20 year annuity off and get a larger lump sum than 105$ million.
Way back when I was a working stiff, I ran a lottery pool of 20 people at $1 per week each, sometimes I bought a few tickets on my own.
Each week, I'd run off 20 copies of the "pool" tickets and give one to each participant before the drawing, thereby preventing anything like this from happening.
Believe it or not, I hadn't really given the matter a great deal of thought. :=) That big a sum of money would open up all sorts of possibilities, most of which are beyond my wildest imagination. (I'm sure I'd figure something out, though, if the need arose.)
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