Does Everyone Really Need to Know You Won the Lottery?
It’s a situation we’d all like to be in. You hit megabucks on a scratch-off lottery ticket. It’s an exciting occasion but comes with its share of issues. For starters, long lost family members suddenly remember your phone number. Does everyone really need to know you won the lottery?
There is a myriad of reasons you might want to keep your lottery winnings anonymous. Of course, there’s the obvious challenge of people expecting you to share in your prize. There are many stories of even distant friends shaking down Powerball winners. There are also tales of random financial “advisors” showing up with questionable investment opportunities. The truth is that there is something to be said for your keeping your winnings private.
Lottery Winnings and Anonymity
There are a couple of things you should know about Texas law and big lottery winnings. For one, under an old law, winners had little options concerning keeping their windfalls secret. Notwithstanding, there were ways around the anonymity requirements. We will tell you about them, as they are a wise consideration.
In 2015, the Texas legislature passed a bill relating to a lottery prize winner’s choice to remain anonymous. However, there is a cost associated with the privilege. In order to remain anonymous, the winner would agree to have five percent of the proceeds returned to the state lottery account. The only information that would be released concerning the winnings would be the municipality and county of residence of the prize winner.
Typically, large lottery winners are mandated to appear at news conferences in connection with their awards. The five percent allows them to forego their obligation. Once again, there is a way to avoid this without returning money to the state lottery account. Five percent can be a lot to give up when it comes to substantial winnings.
The law relating the five percent option in exchange for anonymity came into effect in January 2016. Prize winners must state their choice to remain anonymous when claiming their prize.
How Else Can You Can Keep Lottery Winnings Private?
We mentioned that there other alternatives to keeping lottery winnings private. Lottery trusts can be established for this reason. Not only do they protect the prize winner’s identity, but they also help to make sure the money is distributed fairly.
How do trusts help protect anonymity? Take a look at this 2012 news story that just happened to involve one of our clients. It involved the winner of a $24 million Lotto Texas jackpot. We set up a revocable trust for our client. Instead of the client showing up for the presentation of the check, our firm was permitted to accept it on behalf of the trust. Unless the prize winner ever chooses to go public, their identity will remain a secret.
If you were fortunate enough to win a substantial lottery prize, there are several reasons to seek legal counsel. At Manfred Sternberg and Associates, we have experience in this area of the law. Contact our office to discuss your options before claiming your winnings.