Personal Finance

Here's a 'to do' list if you win the Powerball lottery

Key Points
  • The Powerball jackpot is now worth $700 million.
  • If you win, your first call should be to your attorney.
  • The IRS and your state will make sure they get a (big) piece of your winnings.
Here's a 'to do' list if you win the Powerball lottery
Here's a 'to do' list if you win the Powerball lottery

If you happen to be the winner of Wednesday's Powerball drawing, you're looking at a cool $700 million plus.

If tonight's total doesn't rise, it will mark the second-largest prize in Powerball history. Yet before you start dreaming about how to spend all those Benjamins, there are some practical steps you need to take.

Here are some tips.

1.  Keep the ticket close

Make sure to sign the winning ticket and make several copies. If you are somehow separated from the ticket, your signature should help ensure you still get the prize. To avoid that separation in the first place, put the original in a protected place, like a safe-deposit box.

2. Chill

Typically, lottery winners have three months to present their ticket. Before you decide to prove you've won, however, it's best to first enlist the help of a team of pros: an attorney (this should be your first call), a financial planner and an accountant. It's not uncommon for winners to face legal claims, sometimes from coworkers who either went in on a ticket or declined to and now want a piece of the action.

What to do when you win the Powerball
What to do when you win the Powerball

3. Remain anonymous if possible

It's best not to announce to the world that you've won. An attorney can help create a legal entity — i.e., a revocable trust or a family limited partnership — that protects your identity. If you can't avoid publicity (some states require publishing your identity), consider changing your phone number or living somewhere else temporarily to avoid media attention and sudden money requests from long-lost friends or relatives you never knew you had.

4. Choose a lump sum or annual payments

Figure out whether to take the lump sum or 30 allotments over 29 years. This decision is often made based on your tax situation. Either way, winning $700 million would put you in the highest tax bracket (currently 39.6 percent). This is when relying on the advice of pros (not family) makes sense.

5. Take a deep breath

Before spending a dime, think about what this sudden wealth means. Not only financially, but emotionally. Before giving in to the temptation to fill your driveway with multiple Teslas, give yourself time to process the magnitude of your win. This is often when winners begin to think about their legacy and what societal contributions they want to make. Some even set up their own charitable organizations.