LOTTERIES:

First of all, CONGRATULATIONS!

If you haven't yet turned in that winning ticket you may have some important decisions to make now! Without making things complicated consider these facts:

Some states do not allow you to assign your lottery winnings.
The tax consequences of the annual payments could be reduced depending on how you claim your prize.
Your age may determine if you will see all of the annual payments, do you have a will?
If you are a joint winner, there may be better methods of claiming the winnings than in each individual's name.
How much flexibility will you have 5 - 10 years down the line?

Your winning ticket will draw a lot of attention. You should have the advise of a professional before you claim your prize. We encourage you to have answers to these questions before you take action which will limit your future opportunities. Seek the advise of an attorney and/or accountant.

Unless you intend to sell the entire winnings, frankly you don't need our services at this time.

Lotteries usually pay out over a period of time up to twenty years with a set payment each year. The money for these payments is usually, but not always, established with a state owned annuity.

As the winner you are not entitled to ownership of that annuity, only the annual payments. However, you can sell all or some of your future payments for a lump sum of cash.

There are two ways lottery money can be converted to cash:

Purchase of the future annual payments, or
Loans against the annual payments.

If you have recently won and have received your first payment you are probably being inundated with free financial advise and offers for purchase and other great deals.

We find the greatest need for the sale or loan will occur around or after the third annual payment. At this point most of the things you have dreamed of have been paid off or purchased. Also the number of people "hounding" you has dropped of significantly.

We can purchase either all or part of the remaining future payments without all the hassle.

Purchase of future annual payments

This involves an outright purchase of your interest in the future payments of the lottery. We would then receive the annual checks directly from the lottery authority. This will provide you with a lump sum amount of cash.

Why would I want to sell my lottery payments?

Acquiring a business to develop a continuing income beyond the lottery payments.
Converting a small annual payment into a large lump sum. This is especially true for individuals in groups who split the proceeds several ways.
Make a more sizeable gift to charity in the form of a scholarship fund or endowment, or to assist in a capital improvement of a charity.
Provide enough money to pay off all existing debt. It is not unusual for lottery winners to become over extended in their purchasing, forgetting about the tax consequences until they become due.
Provide assistance to a friend or relative in need of financial assistance.

How much will I get for my future payments?

The amount will depend on several factors. There are certain legal expenses that are required no matter what the total amount of future payments are. Therefore a set percentage is difficult to determine. Other considerations include the number of payments left - how long before the entire amount is paid out, is the lottery assignable, how many other individuals are splitting these payments?: A quote can be obtained by providing us some basic information and documentation.
How long will it take?: One to two months is an average time to complete the transaction.

Loans against future payments

A second option available in providing cash flow for lottery winnings is to provide a loan secured by the future lottery payments.

Loans are structured as if winnings, after taxes, are endorsed over directly to us each year for a loan repayment. We can however, arrange direct payment from the lottery authority.

Loans arranged in this fashion can provide some tax relief with interest expenses deductible from the annual proceeds depending on the use of the proceeds other deductions may be available.

HOW TO GET STARTED:

You can begin by completing the worksheet.
Worksheet info name, address, phone number, fax number, exact date prize was won, exact total amount won and paid out, exact annual payments before withholding taxes and after tax amount received, date of the annual payout.
We will also need a copy of the congratulatory letter received from the lottery authority and a copy of your W-2G tax reporting form from the state for the last two years.

Once we have these documents we can verify your winnings and provide you an offer.