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Money: Mark Cuban advice for whoever wins the $1.4 billion Powerball lottery

playahaitian

playahaitian

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The Powerball lottery has reached a record high of $1.4 billion.



On Wednesday night, someone might win the jackpot and — even if they don’t actually take home $1.4 billion — become incredibly rich in a matter of moments.

Billionaire Mark Cuban has some idea of what that’s like.

Cuban recounted the moment he became a billionaire on an episode of James Altucher’s podcast: “I was sitting in front of a computer, naked, hitting the refresh because we were close — waiting until my net worth hit that billion when the stock price got to a certain point, and then I kinda screamed and jumped around and then got dressed."

Years later, what would he advise a newly minted multimillionaire or billionaire?

Business Insider reached out to Cuban to ask about his tips for potential lottery winners, and he shared the advice he gave his local paper, the Dallas Morning News:

  • [The first thing you should do is] hire a tax attorney.​
  • ​
  • Don’t take the lump sum. You don’t want to blow it all in one spot.​
  • ​
  • If you weren’t happy yesterday, you won’t be happy tomorrow. It’s money. It’s not happiness.​
  • ​
  • If you were happy yesterday, you are going to be a lot happier tomorrow. It’s money. Life gets easier when you don’t have to worry about the bills.​
  • ​
  • Tell all your friends and relatives no. They will ask. Tell them no. If you are close to them, you already know who needs help and what they need. Feel free to help SOME, but talk to your accountant before you do anything and remember this, no one needs $1 million for anything. No one needs $100,000 for anything. Anyone who asks is not your friend.​
  • ​
  • You don’t become a smart investor when you win the lottery. Don’t make investments. You can put it in the bank and live comfortably. Forever. You will sleep a lot better knowing you won’t lose money. ​
He also shared one last bonus tip with Business Insider: "Be nice. No one likes a mean billionaire. :)”
 
BrownTurd

BrownTurd

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Riggz said:
sounds like good advice to me... how does it work if you don't take the lump sum?
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If you take the lump sum after taxes you will end up with about 500 million.

The annuity option after taxes is 800 million but you are paid out over 30 years.
 
BitchI'llKillYa

BitchI'llKillYa

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therealjondoe said:
Except if you die early your family gets none of it.
I'd rather take it all in case something happens to me.
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Not true... you can will it to another party or trust


Winning the lottery is a fantasy for people who imagine the wonderful things they could buy with the winnings, the trips they could take and the freedom they could have to never work again. While you want to be able to enjoy your winnings personally, you also want to ensure your family will be taken care of should you die before all those winnings are paid out. If you are entitled to ongoing lottery payments, those payments will continue to either a beneficiary or to your estate after you die.

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Annuity vs Cash Option

Lottery winners have two options for payment: cash or annuity. With the cash option, winners receive all their payments up front. This amount will be less than the publicized jackpot amount but equal to the amount available in the jackpot prize pool. Winners who receive their winnings up front can determine how those winnings are distributed upon their death. With the annuity option, winners receive payments over a period of 30 years. The sum of all payments will equal the publicized prize pool. This option allows winners a continuous income source for decades.

Beneficiary

Depending on the rules of your state, you may elect to choose a beneficiary to receive the remaining payments of your prize. Unfortunately, most states only allow for one beneficiary to be named, which can pose problems if you have more than one heir you wish to bequeath assets to. Check with the rules of your state lottery commission to review your beneficiary options. If they only allow for one beneficiary to be named and you have multiple heirs, consider forgoing this option in favor of payments made directly to your estate.

Your Estate

If no beneficiary was chosen, your winnings would be sent to your estate for distribution to your heirs. If you have not made final arrangements and don't leave a will, the state will distribute those assets according to the law. Each state has a different way to process estates with and without a will. Consult an estate planning attorney in your area to thoroughly discuss what you need to do to guarantee that your final wishes are carried out.

Taxes

All lottery winnings are taxed by the state and federal governments. As the winner, you are responsible for filing and paying those taxes. Upon your death, your estate and beneficiaries will be responsible for those taxes. Your beneficiaries also may be responsible for inheritance taxes of up to 40 percent, depending on the total size of your estate. Discuss your estate planning options with a certified financial planner who specializes in inheritance issues.
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BitchI'llKillYa

BitchI'llKillYa

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YES

From the powerball faq page


WHAT HAPPENS IF AN ANNUITY PRIZE WINNER DIES?

The estate will handle the lottery prize. A lottery annuity prize is just like any other asset. You can pass any remaining annuity payments on to your heirs or to anyone else.


The Powerball game will even cash out an annuity prize for an estate. This may make it easier for the estate to distribute the prize. It also may be necessary to cash out the annuity to pay Federal estate taxes. We will sell some or all of the securities at competitive bid or will even just transfer the securities to the estate. We do not charge a fee of any kind. We often hear people complain that the jackpot should not go back to "the state" when a winner dies. It does not. I think that this misunderstanding may come from the response that the prize "goes to the Estate" and some people hear "goes to the State."
 
lexdiamonnyc

lexdiamonnyc

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for the married cats, you can take it both ways..........I read about a couple who told lottery officials they considered themselves a pool....she took the lump sum, he took payments......so they had the best of both world.
 
playahaitian

playahaitian

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BitchI'llKillYa said:
YES

From the powerball faq page


WHAT HAPPENS IF AN ANNUITY PRIZE WINNER DIES?

The estate will handle the lottery prize. A lottery annuity prize is just like any other asset. You can pass any remaining annuity payments on to your heirs or to anyone else.


The Powerball game will even cash out an annuity prize for an estate. This may make it easier for the estate to distribute the prize. It also may be necessary to cash out the annuity to pay Federal estate taxes. We will sell some or all of the securities at competitive bid or will even just transfer the securities to the estate. We do not charge a fee of any kind. We often hear people complain that the jackpot should not go back to "the state" when a winner dies. It does not. I think that this misunderstanding may come from the response that the prize "goes to the Estate" and some people hear "goes to the State."
Click to expand...

but that estate tax?

Is MURDER.
 
DaAssWatcher

DaAssWatcher

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BrownTurd said:
If you take the lump sum after taxes you will end up with about 500 million.

The annuity option after taxes is 800 million but you are paid out over 30 years.
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Shut up.After Taxes no state that taxes lotto is under $600 million lump sum.States that don't tax are 697 million.
Annuity is 1.125 billion if state doesn't tax and state with highest tax rate is 992 million.
 
PsiBorg

PsiBorg

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You always take the money up front. If you invest it right, you'll do better than the annuity could in 30 years. He's dead on with the tax attorney though. The tax attorney is an absolute must have.
 
Mr.Chuckles

Mr.Chuckles

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Set up a iron clad trust with your accountant and attorney and don't take the lump sum 20-30 years of 30+ million or so is enough spread out over time to auto correct most foolish mistakes but then again some people are .........................
 
heiesuke

heiesuke

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I'd be the only smart one to take the annuity. $40 mil a year for 29 years, is plenty to fcuk with and make all kinds of business maneuvers. You should get a good amount of credit to go along so if you need a huge loan on something, that should be no problem too. Lump sum is dumb way out.
 
BDR

BDR

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heiesuke said:
I'd be the only smart one to take the annuity. $40 mil a year for 29 years, is plenty to fcuk with and make all kinds of business maneuvers. You should get a good amount of credit to go along so if you need a huge loan on something, that should be no problem too. Lump sum is dumb way out.
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Sounds good but you can't bet one future earnings with the lotto who's to say they can't make future payments to you anymore?

Take the lump sum you get your money up front and don't have to pay taxes on it ever again and if your really savvy you would take the lions share of it and put the Prinicipal in a family trust where it is to pay you quarterly of the interest it generates.. That shit will last generations for your family
 
jagu

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You don’t become a smart investor when you win the lottery. Don’t make investments. You can put it in the bank and live comfortably. Forever. You will sleep a lot better knowing you won’t lose money.

This is the most important. I hear people talk about opening businesses when they win the lottery. That's one of the most stupid things you can ever do, unless you win very little money and you still need to make a living.
 

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