What would you do if you won the lottery? Buy a boat? Send your family on a round-trip vacation to Hawaii? For many, the possibilities seem endless. And in a way, they really are. As a standard procedure, many lottery payments are presented in the form of a lottery annuity. That means that upon winning, you will receive one large sum at first, then subsequent small payments that increase in size by a small percentage each year. For many, this procedure is ideal, as it provides a sort of guaranteed paycheck throughout the years, and many can live comfortably off of their lottery payments over time.
But for some, this process isn’t exactly ideal. Did you know that nearly one in five Americans between the ages of 18 and 24 consider themselves in “debt hardship?” To boot, 26% of Americans admit to not paying their bills on time, usually due to a lack of funds. When you sell your lotto win for a lump sum, you get your lottery payment up front and you are able to do with it what you’d like.
But when settling lottery payments, be aware that there is a process involved. In order to get a lump sum payment, you have to show up in court with a legitimate reason as to why you need your money in full. Then, the judge will either approve your deny your request for a lump sum or annuity.
But before any of this can happen, you have to actually win the lottery first. And knowing what to do when you win the lottery is extremely important. Before you even think about spending any of your cash, be sure to be discrete about your big win. Winning the lottery can be a drastic, life-altering experience. That being said, people might start to treat you differently — both in the office and at home. Because of it, mums should be the word for a while. Don’t quit your job right away, and don’t alter your lifestyle dramatically. That way, you can spend your lump sum or annuity in a responsible manner.