Ep 045: The next jackpot for the next Powerball drawing has hit $1.5 billion. If you win it, you won't ever have to worry about money again--right? Wrong.
With good money management you--and your heirs--could live handsomely for many, many years. But from the moment that you claim that prize, you will be descended upon by vultures who want a hefty helping of those winnings. And if you didn't have smart money habits up until now, you could easily turn out to be your own worst enemy by quickly squandering the fortune. There's actually a term for this, it’s called a "Lottery Curse Victim"!
With that, we have wanted to tackle the concept of winning the Powerball with three pillars of help: legal, tax, and financial advisory. Our first guest was recently on episode #39 -Estate Planning Mistakes that Lead to Probate Litigation, she is on the executive committee for Legal Services for the Elderly in Maine, the Maine Justice Action Group, a member of the Academy of Special Needs Planners, and an advisor to the Peaks Island Fund, a Maine Community Foundation fund. She also teaches elder law as adjunct faculty at the University of Maine School of Law. She was a member attorney of Maine Center for Elder Law, LLC prior to the Center merging with Perkins Thompson, P.A. in September of 2019. Our second guest joined BBSC Certified Public Accountants in 2015 as a Senior Accountant with 7 years of experience in public accounting and is now a Principal at the firm. He works with small to medium-sized businesses in a variety of industries, including real estate development, retail companies, service providers, and construction companies. He advises on and prepares returns for partnerships, corporations, and individuals. He also handles the Firm’s personal property tax programs administered by the State of Maine and local municipalities, the BETE & BETR programs.
Please welcome Barbara Schlichtman and Justin Freeman to the Retirement Success in Maine Podcast!
LEGAL SEGMENT – Barbara Schlichtman, Attorney [3:12]
Basics about a trust and why estate planning is so important, especially in a case of wealth. [3:55]
Why are Fiduciaries so important? [9:34]
I WON! What is the timeline for getting the legal structures in place before claiming the prize? [20:55]
What should people consider before gifting/donating away the prize money? [30:20]
TAX SEGMENT – Justin Freeman, CPA [39:38]
How are lottery and gambling winnings taxed? [41:34]
From a tax perspective, when does it make sense for someone to choose the annuity payout or the lump sum payout? [45:22]
When a pool of people purchases lottery tickets, and they win, how does that work from a tax perspective? [48:42]
What happens if the lottery ticket is purchased in another state? [50:36]
How much can charitable giving help reduce the tax bill over time? [54:40]
How can a trust receiving the winnings help from a tax perspective? [1:01:39]
FINANCIAL PLANNING SEGMENT – Guidance Point Advisors, LLC [1:10:07]
Annuity or Lump Sum, and why? [1:11:33]
How to invest the money? [1:18:41]
What to consider when realizing your dreams after winning the Powerball? [1:25:08]
What are some practical things to be doing with the winnings? [1:32:39]