Q&A for How to Spend Lottery Winnings

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Do I have to share equally with my spouse?

Community Answer

Yes, you have to share.

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Question

Can the lottery office keep my winning confidential?

Community Answer

No, they cannot.

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Question

How much tax can they take if I win $1 million from the lottery? And what type of account can I deposit the money in?

Donagan

Top Answerer

It depends on where you live and which lottery you're playing. Suffice it to say that you'll pay in total taxes somewhere in the neighborhood of 50% of your winnings. The rest of the winnings are yours to do with as you wish, meaning you can put them anywhere.

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Question

There is no way you can not self-indulge a little. If the average person wins the lotto, how much do you suggest they use as disposable income per 1M they win, after taxes?

Tom De Backer

Top Answerer

The most frequent advice is to indulge yourself once and only once. Then, keep your current level of earnings/spending exactly as it is now. So for your question, that would be 0$ per 1M won. People quickly adjust their lifestyles upward, but often do not readjust the lifestyle downward again. Having some money makes the average amount you get used to spending higher than what you could ever pay back with a regular salary. So buy one Ferrari, get solid financial advice and many second opinions. Provide for your pension, set aside some savings, invest if you know how, and spend only as much as your winnings allow you so you can live out your life on that monthly amount.

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Question

Would splitting my winnings equally with my children affect the initial tax payout?

Community Answer

Your children did not enter the lottery or sweepstakes (if they had - they would have won the money directly, as long as they were of legal age to enter). While you may gift your children money - you will have to pay taxes on your personal lottery or sweepstakes winnings prior to making that gift. Community property states may allow you to split the money with your spouse, or keep it all to yourself depending on the specific state laws and any pre-existing prenup or other financial agreement that is legal within your state (note that most often that both parties must have independent and appropriate qualified legal representation for those agreements to stand up in court).

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