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Do you believe that winning the lottery will fix all of your problems? If so, reconsider your options since there are several fresh ones to consider. New money brings new issues!
Winning the Tatts lotto, for example, would undoubtedly allow you to pay off debt and save the rest for a better future. However, winners should take note that if you cash in your winning ticket, prepare for an emotional roller coaster journey like you’ve never experienced before.
Everyone had heard of lottery winners who let their money go to waste and had nothing to show for it when they finally cashed out their riches. Your luck may not run out, but you can be sure that once the word gets out about your good fortune, your life will alter radically.
Gather Legal and Financial Experts to Assist You
It’s difficult to tell who’s trying to assist you and who’s attempting to take advantage of you when you’re in a position like this.
Hence, as opposed to joining up with a group of experts that someone else has assembled, it is suggested that you hand-pick your lawyer, accountant, and financial advisor and require them to work closely together.
What to Do Before You Meet With an Adviser
- Please do your homework and make sure they’re a good fit.
- Visit the Australian Securities and Investments Commission (ASIC) to look for broker records.
- Check with the state’s disciplinary authorities to determine whether any complaints have been made against lawyers and insurance agents.
The group you assemble will essentially serve as your board of directors. First, have a long-term financial plan prepared by a fee-only adviser and run it past the group for feedback. They may act as a check and balance on each other after you’ve settled on a strategy. Also, have one of them act as the team’s coordinator by acting as the quarterback. And another option is to have a “bad man” who refuses to make presents if requested by other persons or groups.
Take Precautions to Keep Your Possessions Safe
So, People with a high net worth should take precautions to prevent their assets from being taken by creditors. They range from enraged ex-spouses and bitter spouses to persons who have won litigation against you and are now your enemies. Besides, people may try to sue you if they believe you have a lot of money. And if you win the Tatts lotto, everyone will be lying in front of your vehicle because they will sue you if you drive them over. So, it’s a good idea to make sure you’re not a target for anybody.
You may put up several barriers to make it harder for creditors to obtain your money and possessions. And these so-called asset protection techniques may vary from relying on exemptions under state law to putting up numerous barriers through trusts, limited family partnerships, and limited liability firms, among other things. So, diverse tactics, either alone or in combination, may be effective.
Consider Making a Charity Donation
An annual charitable deduction may be used to offset a portion of your lottery wins (or annuity payments, if you want). Donors may claim an income tax deduction of up to 50% of their adjusted gross income (AGI) for cash contributions and up to 30% for gifts of appreciated assets held for more than 12 months when making a gift to a public charity.
Donor-advised funds may be an option if you accept the $1.5 billion prize in a single amount and are unsure which charity you want to support before the end of the year. As such, this year, you may donate to charity and deduct it from your federal income tax, but you can’t make suggestions about which organisations should get grants from the fund until next year if you use a donor-advised fund.
Re-Examine Your Will
If you’ve suddenly become wealthy as a result of your victories, estate planning may be something you’ve never had to do before. Meanwhile, the new tax code enacted in 2012 gives taxpayers more options than they’ve had in the past. And, there is a $5.45 million tax-free transfer maximum per individual as of 2016, which may be used during life, at death, or a combination of the two. So if you’re feeling generous, this would be a great moment to spread the wealth around to your family and friends.