94-Year-Old Lottery Winner Wants Payout

[Moses]

http://cnn.netscape.cnn.com/news/story.jsp?idq=/ff/story/0001%2F20041229%2F1728964471.htm

BOSTON (AP) - "A 94-year-old woman who won a $5.6 million dollar Megabucks lottery drawing in September wants to get the cash now instead of a 20-year annuity payout."

No kidding.

[mikester]

WOW!

Outlived her husband and her children....

I can sympathize but if the rules do not permit it then I can't see making an exception - especially since she can leave the remainder to her heirs as she wishes.

In the immortal words of some old english folkes...

...You can't always get what you want but if you try sometimes you get what you need.

[Moses]

I guess I was wondering why a 94 year old buys a lottery ticket anyway. Guess you can buy a lot of bran with 5 million dollars.

[widebody911]

Is the prize even transferrable to heirs? I wouldn't be surprised at all if part of the lottery revenue model is such that they don't expect people to live long enough to collect the prize.

[pwd72s]

Mass. must operate under different rules. Here in Oregon the winner chooses...cash or annuity. (Edit) It pays to be a bean counter here. The last Oregon lottery winner did just that. A semi retired accountant winning a $30 million "jackpot". He opted for the cash, which was $13 million or so after the tax man bite. He noted that the annuity had a yield of roughly 3%, and he thought he could do better than that elsewhere.

[legion]

I believe here in Illinois you can either take the full-dollar payout over something like 30 years, or you can take a reduced one-time payout. Not sure how the NPV of one compares to the other. I know there are also places that will "buy" annuities for cash (like lottery payouts and lawsuit payouts) for the equivalent of really crappy rates.

[vash]

could you date her for all her cash?

[Moses]

Originally posted by vash
could you date her for all her cash?

eeeewwww!

[tabs]

Lotteries buy Annuities for the 20 plus year payouts....thats why they discount the Lottery Ticket when you want an immediate payout....also you have to pay the income taxes no matter what...

Lottery tickets are indeed transferable to your heirs....one sticky little problem the Inheritance Tax is due is 9 months after death...so if you still have a balance of 5M for example you have to come up with the cash for the taxes...since most people don't have that kind of stroke, they have to sell the remaining proceeds of the Lottery ticket.

Thats why if you are a big winner, you want to put the name of all your heirs on the ticket, because that portion of the proceeds becomes part of their estate and not yours...

I guess the rule for taking cash now or waiting for the 20 year pay out depends upon your age...at 94..I want it now, at 24 I'll take it over time...with time you can strategize your Income Taxs and reduce them somewhat.

[legion]

Good call Tabs! I forgot about the tax implications.

I've always found it funny (in a very sad, defeated way) that when you win the lottery (which I consider a regressive tax), you have to pay taxes on your tax-financed winnings. Correct me if I'm wrong, but Social Security payouts are taxed too, right? How perverted!

[techweenie]

There are any number of companies that will advance her the cash against the payout at a rate of maybe $0.45 on the dollar... she just has to create a legal entity (trust?) that will continue to get the payments after she dies.