Mega Millions jackpot soars to $422 million. If you win, here's how to say no to sharing it

  • To protect the amount of money that's left after paying taxes on your winnings, you should take time to create a financial plan that will ensure the money lasts and you can meet your own life goals.
  • Experts recommend appointing a gatekeeper to handle all requests for loans, gifts, donations, business investments and the like.

With no one hitting the Mega Millions jackpot Tuesday night, the prize has climbed to $422 million.

If you win big in Friday night’s drawing, you should be prepared to field an onslaught of requests for a piece of the bounty. While it can feel good to share your newfound wealth, doing so also can eat up more of your windfall than anticipated.

“Some people give away too much money to family and friends, and they do it to a point that it damages their own life goals,” said certified financial planner Jim Shagawat, president of Windfall Wealth Advisors in Paramus, New Jersey. “When the gifting starts, it’s difficult to stop.”

Photo by Kevork Djansezian / Getty Images staff

For starters, remember that you won’t really have the advertised amount once you pay taxes on your winnings.

The winner gets to choose between taking an immediate lump sum or receiving annual payments over 30 years. Either way, Uncle Sam will shave 25 percent off your check (or checks).

For example, if you chose the lump sum option of $254 million, the Internal Revenue Service would take $63.7 million of it, leaving you with $191.1 million.

On top that, you face state taxes unless you live in one of a handful of places where lottery wins are tax-free. In states that do take a piece, the range is from a high of 8.82 percent in New York to a low of 2.9 percent in North Dakota, according to lottery site

Largest Mega Millions jackpots

Number of winning tickets
Where tickets were bought
1 $656 million 3/30/2012 3 Kansas, Illinois, Maryland
2 $648 million 12/17/2013 2 California, Georgia
3 $536 million 7/8/2016 1 Indiana
4 $533 million 3/30/2018 1 New Jersey
5 $522 million 7/24/2018 1 California
6 $451 million 1/5/2018 1 Florida
7 $414 million 3/18/2014 2 Forida, Maryland
8 $393 million 8/11/2017 1 Illinois
9 $390 million 3/6/2007 2 Georgia, New Jersey
10 $380 million 1/4/2011 2 Idaho, Washington

Your final tax bill to both your state and the IRS could also be much higher, depending on your individual situation.

Of course, you'll still be far wealthier than you were before winning. To protect the amount remaining after taxes, you should create a financial plan to ensure the winnings last and allow you to meet your life goals.

Part of that means knowing how to say no.

Appoint a gatekeeper

The first thing you should do when you win is assemble a team of experienced professionals, including an accountant, a financial advisor and an attorney (this should be your first call).

One of those pros should be your gatekeeper for all requests for money, whether from family, friends or others.

The more people who know about your newfound wealth, the greater the chance you’ll be approached. This means you should maintain your anonymity if possible, which is easier in some states than others.

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Either way, having a gatekeeper to screen all requests and fend off outstretched palms can ease any pressure or guilt that could lead you to making foolish financial decisions.

“I tell clients to tell all of their friends and relatives that they can’t make any donations, gifts or investments without running it by me as their advisor,” said Jason Kurland, a partner at Rivkin Radler, a law firm in Uniondale, New York.

The big no-no's

Shagawat advises clients not to cosign a loan. While your wealth may enable a family member or friend to qualify for, say, a loan on a pricey car, you have to assume you’ll eventually be on the hook for it.

Basically, if the person couldn't qualify for financing on their own, there's a good chance they won't be able to keep up with the payments.

“When you co-sign, it’s your loan,” Shagawat said. “You are personally responsible for it.”

He also recommends saying no to investing in a friend’s business venture, highly pitched investments and any investment that you cannot explain to your spouse.

The important thing is to avoid becoming a lottery winner who unintentionally fritters away their windfall.

“The main reason that happens is there’s a failure to develop a plan for careful and thoughtful management of the money,” Shagawat said.