Do You Need to Create a Trust If You Win the Lottery?

The popularity of multi-state lottery games has led to increasingly higher and higher jackpots. Mega Millions, which is played in 46 states, the District of Columbia, and the U.S. Virgin Islands, recently awarded a $1.602 billion jackpot on a ticket purchased right here in Florida. Although curiously, media reports identified the “winner” as a limited liability company rather than an individual.

Florida LLC Claims Billion-Dollar Prize

According to the Florida Times-Union, the winning ticket was purchased in August 2023 at a Publix store. The claimant is Saltine Holdings LLC. Florida Lottery officials told the Times-Union that the LLC filed its claim on December 26, 2023.

This was most likely an LLC formed for the express purpose of claiming the Mega Millions jackpot. And it is not an uncommon or illegal practice. Many people who win the lottery–especially these kinds of highly-publicized jackpots–wish to preserve their privacy. A few states do allow lottery winners to claim a prize anonymously. Florida is not one of those states. But Florida does allow a legal entity other than an individual to claim a prize, including an LLC or even a trust.

Aside from privacy, there are a couple of reasons why a lottery winner might wish to claim a prize in this manner. First, if the winner is unmarried, keeping their winnings in a trust can help ensure it is not classified as a marital property if they do later get married. Second, if multiple persons bought the winning ticket together–say a group of co-workers chipped in to buy a block of tickets–it can be a lot easier to manage the jackpot through a separate legal entity. And third, if the winner decides to take their prize as an annuity rather than a lump sum, using a trust can ensure any future payments are immediately available to the trust’s beneficiaries should the winner die before the final payment is received.

It is important to note that the type of trust used to claim lottery winnings will vary depending on the situation. For instance, if you are using a trust to split a jackpot among multiple winners, you might structure it as an irrevocable trust to ensure everyone receives their fair share. The type of trust can also have significant tax implications, particularly if the winner plans to make large cash gifts to friends or family members from their winnings.

Contact Attorney Mark R. Manceri Today

As with any important legal decision, it is always best to consult a qualified attorney before setting up a trust or any other legal entity to hold assets. And if you are involved in a legal dispute involving the establishment or administration of a trust, you should seek out an experienced Pompano Beach estate and trust litigation lawyer who can effectively advocate for your interests in court. Contact the offices of Mark R. Manceri, P.A., today at 954-491-7099 to schedule an initial consultation with a member of our staff.

Source:

msn.com/en-us/news/us/158-billion-mega-millions-winner-in-florida-revealed-ticket-was-purchased-from-a-publix/ar-AA1m3FtM