How many years will need to be paid before the annuity matches the lump sum payout?
Winning the lottery is not all that it’s cracked up to be unless you get the proper advice and strong trust and estate planning. • Mega Million lottery and most others can be inherited in annuity payout form. So for estate tax purposes, it is really important whose name is on the ticket when you claim the prize. If you do it right, you can set up a trust before you claim the prize, making the trust as the owner, and work toward getting the money out of your estate. • You are correct about the winnings being paid in installments, (annuity). The installments include investment earnings, so the total number of dollars will be larger than the prize taken in cash. But the present value of dollars to be paid in the future is worth less than the dollars paid today. This means the total prize will be the same no matter which way you take it. • You do not pay the income tax when you win the lottery. You have money withheld from proceeds. Under the government rules on form W2-G it is 25% of the
