Divorce and the Lottery Jackpot
A couple who won a 148 million lottery jackpot is divorcing. The couple became multimillionaires after winning the jackpot more than a year ago. The lottery jackpot is not the only reason they are divorcing, however. Taxes and time value of money play a role in calculating the lottery jackpot payout. Those who choose to receive the money in a lump sum will likely face higher taxes than lottery winners who choose to receive the money in an annuity.
Those who choose the annuity option for lottery prizes are typically unable to claim their jackpot prize ahead of time. The payout amount, which is based on the lottery’s annuity option, can vary considerably. In general, the current cash value of a lottery jackpot is about half its advertised value. To determine how much a lottery jackpot winner will receive after taxes and annuity payouts, use an online tool like AfterLotto.com’s payout calculator to see what the actual cash value of your jackpot will be after federal and state taxes.
The amount you can claim as a lump sum can be huge. But there are many things you need to do before you claim your prize. For example, you may want to hold onto your job and maintain your relationships. You may also want to protect your children and community. Think about your priorities before claiming your prize. A financial advisor can help you make a plan for your future. You can even consult a therapist for emotional and financial counseling.