If you don't happen to read the article and think to mention the anonymous trust way of accepting the winnings. She can't do that either.
"The state allows people to form an anonymous trust, NewHampshire.com reported, but it’s a moot point for the woman — she signed her name on the back of the ticket shortly after winning, and altering the signature would nullify the ticket."
Oh and an excellent tidbit out of the story is that the attorney representing her actually blogged about the winner having been in NH and how the winner should not sign the back of the ticket. Apparently the ticket winner is now using that attorney to represent her in the courts. https://www.shaheengordon.com/New-Hampshire-Legal-Blog/2018/...
So moral of the story is to never sign your ticket.
Looks like some lucky person was smart enough to do that.
"In 2016, the last winner of the Powerball followed that advice. The $487 million prize claimed through the Robin Egg 2016 Nominee Trust, which was created by Shaheen, and he serves as its trustee."
Not exactly, it is advised by the lottery office to immediately sign your ticket. Otherwise it may create a lot of unnecessary troubles, like your ticket is lost, robbed, or some friend claims you had verbal agreement on splitting the rewards, etc.
Losing the ticket is NOT extremely rare chance at all. Avoiding troubles going public, versus losing all of the million dollars rewards, it's obvious what people would choose.
I think the moral is... do not talk/sign/call/anything, walk, no run, to a good lawyer well versed in the area of: "I've just won the lottery, please help."
A lot of people are cheated out of their winning each year by sales clerks that check the ticket, tell the buyer "nope, it's a loser", then pull the ticket out of the trash once the buyer has left.
Signing the back upon purchase is a strong defense against this fraud. So it's not as black-and-white as it seems.
I can only talk about Canada, but in both Ontario and western Canada they scan your ticket and an audible sound is made if you are a winner (or loser). For both winners and non-winners, a receipt prints out and the clerk gives you both.
Additionally there is a self scan kiosk where you can check your ticket. And there's always publicly listed winning numbers.
However, I will add that often a clerk won't scan your ticket if it's not signed. Therefore, if you want to check your numbers without signing the ticket, your options are self scan, their official app, online numbers, newspapers etc. Lots of options.
No idea how the system works, but if the clerk is able to disable the scanner and manually press a hidden button that plays the audio of the losing sound, seems like a pretty easy system to break.
Probably not many people do, but the point was made in regards to the comment that "a lot of people are cheated out of their winnings". I made the comment to simply point out that may have been the case in the future, but most modern lottery corporations have made efforts to eliminate that.
You have anything to back that story up? Even an online article?
Most lottery systems around the world will buzz a "winner" or "not a winner" sound and some flashy lights when you bring the ticket to a clerk. Try it in Germany, England and USA (places where I played lotto and witnessed it firsthand)
(and yes, a lot of systems now have self-service terminals that one can use to check your own ticket, and cashier terminals that make audio, but fraud will always find a way.)
Even an online article?
Were you looking for a paper copy? I don't have your mailing address.
But, why? Because she accidentally signed the ticket before realizing that it invalidated that option? She holds the winning ticket, just let her redact her signature from it legitimately and claim her winnings.
The question is whether the law establishing the lottery permits that, and if so what clear limits the court can put into place so that the agency operating the lottery doesn't have to contend with too many complex scenarios that could ultimately result. Money attracts litigation, especially when the rules aren't crystal clear.
It sucks for this woman, but technically she could always forgo the winnings altogether. Nobody is forcing her to take the money, or to keep it. She wants to have her cake and eat it too. What's she's asking is reasonable on its face, but there are larger considerations at play.
The legislature is still free to address this woman's concerns directly, as well as for future winners. Ideally that's what would really happen. Maybe she should pledge some donations to her friendly neighborhood representatives.
> The question is whether the law establishing the lottery permits that
But that’s shouldn’t be the question. The question should be whether that law is extremely dumb (obviously it is), and whether it threatens to place undeserved stress on an individual going through a major life event (it does).
There are good reasons for forcing winners to be publicly named. One of which is that it helps the integrity of the game - harder for the lottery organizer to just not pay out, or to cheat and pay it to their lackeys every time.
I understand why people don't want everyone to know they're rich. I'm rich (not $560M, but some) and you can figure that out from various news stories, and it does affect relationships somewhat. More so outside Silicon Valley.
On the other hand, I understand why lotteries want to publicize winners in their marketing.
A fair deal might be, that the publicity value is defined to be X% (say 10%) of the prize, and you can take the full prize with publicity, or the prize - X% anonymously.
If I'm not mistaken, it's about more than just publicity; it's also about avoiding fraud. As someone put it before "come spend money on a chance to win a very large pot of money; don't worry, we have given some out before, but you just have to believe us".
>In 2000, the U.S. promotion was halted after fraud was uncovered. A subcontracting company called Simon Marketing (a then-subsidiary of Cyrk), which had been hired by McDonald's to organize and promote the game, failed to recognize a flaw in its procedures. Chief of security Jerome P. Jacobson[3] was able to remove the most expensive game pieces, which he then passed to associates who would redeem them and share the proceeds. The associates won almost all of the top prizes between 1995 and 2000, including McDonald's giveaways that did not have the Monopoly theme. The associates netted over $24 million.
Yet other countries (and even some states) get by without releasing the name. All you need is oversight, which frankly should be a prerequisite of a lottery either way. The real question is why investigative journalists are America's means of oversight rather than have a real system in-place?
The whole thing places lottery winners into a dangerous situation, and everyone knows it. That's why the stereotypical "change your name and move" advice is so often recited.
That's entirely why a number of states require it to be kept non-anonymous for winnings above certain amounts. Because the lottery is run by a private organization they don't want that org to be able to act like it's paying out without providing proof to the public. Otherwise you can end up with situations like the mcdonalds monopoly scam. https://en.wikipedia.org/wiki/McDonald%27s_Monopoly#Fraud
But in this case she would have been allowed to accept the ticket under an anonymous trust. The only problem is that she signed the ticket, and there is an incredibly stupid legal technicality which prevents you from changing the signature.
It is ludicrous that it would take a judge more than a few hours to review the law and make a decision to allow her to change the ticket to an anonymous trust.
In the UK, lotteries are well regulated and audited by commissions who confirm payouts, etc.
It's OK to stay anonymous, particularly in the largest lotteries (National Lottery and Euromillions, both operated in the UK by Camelot Plc), and you can not be publicly named without opting into it.
It's my understanding that every person who gets a prize over £500k on the national/euro lotteries gets a visit from a Camelot employee to ensure they're prepared to handle the money and are speaking to suitable people who are not going to destroy their good fortune.
I don't see why other lotteries in other countries can't do the same without the risk of fraud increasing.
It can also prevent a spouse or common law partner from winning the lottery in secret and taking off with all the money. It's happened more than once in Ontario, Canada, with one story making the rounds right now.[1]
Someone defrauding the system would know it well enough to claim it under an anonymous trust. The winner unintentionally forfeited this right by signing her name on the ticket.
My understanding is that the lotto wants free advertising at the cost of the winners being made very public.
It seems like this individual is doing a tremendous public service by taking this to court. I think most of us would balk at the risk of somehow losing the millions of dollars.
But how does making the winner's name public avoid fraud? I assume the government needs to look at something and say "looks legit". So couldn't they do that in private? Have some judge or gov't official put their stamp on it and say "yes, the winner was a real person not affiliated with the lottery" or whatever needs to happen.
I think it's more unofficial than that. As other people have said in this thread, identifying the people publicly allows others to see their face, and see that they are real people. If it were simply "A judge has declared the winner legit" every time, people would get suspicious.
Good, a tax on the uneducated, desperate, and mathematically illiterate is cruel and morally reprehensible to begin with. Propping it all up with publicity generated at the direct expense of the winners is pathetic.
What about those who are educated, successful and well versed in the mathematics of probability? They should be prevented from playing because you feel that some people should be protected from themselves?
Or do we now need an IQ test before certain types of activities can be enjoyed?
Yes, but governmental, judicial, and financial malfeasance do happen. And with this much money involved, there's basically a certainty that it would. Government-sponsored entities awarding millions of dollars to anonymous persons gets sketchy really quickly.
If the fact that a name gets attached to the prize is the only thing stopping them, then they could easily make up a name and photoshop a picture. This feels like it's getting into conspiracy theory territory.
The point of oversight is to avoid fraud. The point of releasing a name is for publicity and nothing else.
How does releasing someone's name and location even avoid fraud within itself? It only works if people invade that individual's privacy (e.g. job, associations, etc).
there are plenty of ways to avoid fraud without having to recall the identity to the public, the main being state auditing of all lotteries, which should probably happen anyways
I believe the issue with state's auditing their own lotteries is that it still leaves a fair bit of room for public corruption. By declaring winners openly, it avails anyone among the public to research potential corrupt connections between lottery winners and lottery operators.
A third party should audit the lottery, not the state. If the payouts are from a purchased annuity, this type of audit is almost certainly required - not the state auditing itself but a 3rd party auditor.
Think we can assume none of it is true. Seems a bit alarmist. At most its no different than what any other wealthy person has to deal with. Welcome to being rich.
The follow up is pretty good advice too and is the advice I have been given by lawyers I know that are familiar with these problems... also they have all advised getting the hell out the country for awhile. Congrats, you are taking a two-week vacation in London or Paris. Long enough to get paperwork dealt with and short enough that it does not need explanation to family, friends or colleagues.
I'm not sure I do. She opted into a transparent system and gets the down side that comes with it (or opts out). If this was thrust upon her, I might feel different. I fear the precedent this would set for redacting names from Forbes lists and the like. It's one of those unfortunate occurrences where openness and privacy are in conflict and when it's government actions like this, arresting someone, awarding some other monies to someone, etc I think openness should prevail.
I don’t see the value in sticking to this legal technicality. She could have accepted the ticket using an anonymous trust, but since she signed it with her own name instead, she’s not allowed to change it. Since anonymous trusts are already legal there, there’s no threat of “losing openness.”
I mean come on, that’s such a petty technicality for such a massive life event. Just let her set up the anonymous trust and move the ticket to it.
The problem is allowing people to challenge the process, ex post facto, by which a winner is established. You can't think of any reason why making it easier to challenge that process--to change the outcome--might be problematic for an agency tasked with giving away hundreds of millions of dollars? Finality is one of the primary functions of rules and laws--of justice--often more important than getting a "correct" outcome in any particular case, especially in cases such as this where the woman is free to return to the status quo ante by forgoing the winnings altogether.
And in as much as courts can make and change laws, they must do so on principle, almost always by applying or extending some pre-existing principle of law. It can be difficult to articulate a principle cabined to the particular facts of a single case. It's much easier for legislatures to do that--to craft a rule that literally recites the facts of this woman's case so that the exception only applies to her and to people facing her exact same circumstance.
Maybe the court can do that in this case. We just shouldn't make the mistake of thinking it's an easy case to resolve.
I don’t get it. No one is challenging the owner of the ticket, as far as I can tell. This woman is the owner. So, assuming they can confirm that she is the rightful owner right now using whatever existing process is in place, then why not do that confirmation, then let her choose to assign the winnings to an anonymous trust?
I can't say for sure but I doubt the court would let you challenge the process so easily if you didn't have a winning ticket, because you wouldn't have standing.
I don't really appreciate skirting "technicalities", especially in a precedent-setting legal decision. If the law is wrong (or even if the spirit/intent of the law does not apply here), she should win and the law should change or be struck down. I wouldn't mind if the judge decided "it's illegal to make someone who signed a lottery ticket with their real name not change to a trust and keep their name hidden." But I would mind if the judge decided "I feel sorry for her, in this one instance she can remain anonymous."
If you read any legal opinions in visible cases they are never just the judge feeling or not feeling sorry for the plaintiff (or defendant) and are deeply steeped in the law as written as well as precedent before even approaching making new precedent. Maybe a judge could comment but I’d venture they would almost avoid territory that would be ripe for appeal as much as possible.
Judges that aren't on specialized tribunals aren't expected to, and mostly don't, know the law (because it's quite impossible) - they rely on the Barristers to inform them, then get their clerks to do some digging to see if the briefs are on point. The higher up you go in the chain, the more clerk time they have to research and the more control they have over how long they take to put out their ruling.
Junior judges are more reticent to rock the boat - they have less resources, less understanding of how the judicial boards and other oversight mechanisms work, etc. Old greybeards generally stop caring - either about bothering to change things or about how 'safe' their ruling will be on appeal. The most active in tossing bad precedent out the window generally end up being the ones that get appointed to higher ranking courts.
I think this should set a precedent, and I am quite confident that it wouldn’t cause any problems other than the lottery being upset about losing publicity.
I think that's reasonable and would not be surprised if the judge says that the harm placed on the individual by the state just for participating is too large, legally. But I would also not be surprised if public's right to know trumps all.
I'm not sure what the compelling public interest is in knowing the name of the person who won the lottery. I suppose there's some argument for transparency to better protect against, say, relatives of lottery officials regularly winning. But I presume there are other safeguards in place to check that things are run on the up and up.
The state gets their substantial cut--both through the lottery itself and through taxes--either way. Without having looked into the history of lottery practices, I'm pretty unconvinced that winners need to be outed to collect their winnings.
We should ask our judges not to legislate from the bench by giving narrowly construed decisions contrary to the written law that apply to nobody else. Either every lottery winner in the state is legally right to remain anonymous and collect (be it via changing to a trust whilst remaining anonymous or however) or every one is not. This is not some extreme example and I can definitely see this coming up again.
Very few people talk about this, but there are two categorically different forms of judicial activism - one where judges carve out from themselves or the executive or legislature, powers (usually regulatory) from whole cloth. And one where judges restrict the power of the state (e.g. "the state cannot arrest someone for burning the flag, whether or not such a law exists").
Which one would you suppose a ruling on this falls under?
> Which one would you suppose a ruling on this falls under?
The latter hopefully/clearly. But I don't consider it activism to uniformly apply your interpretation of the law. The activism I was concerned about is narrow application in this supposedly "exceptional" circumstance. Is that a "third form" or is it an extension of the first except they carved it out for someone else?
>We should ask our judges not to legislate from the bench
Why not? This is a core facet of their job.
The tug of war in law between flexibility and certainty is nothing new.
In this case you've state the outcome should be either all entitled to anonymity or all restricted from anonymity. Why are those the only two options?
Say sociological research shows: 1) people conceal lottery earnings from spouses in the context of divorce with tremendous regularity, and 2) people who obtain lottery earnings are 10x more likely to be killed by distant, financially-at-risk relatives. Should a lottery winner with 3 violent felons with debts in his family be dealt with in the same manner as an upper middle class winner in the middle of a divorce?
This is why our judges get to tinker with our rules. Because real life has edge cases.
>This is why our judges mostly do not get to tinker with the rules.
They mostly don't tinker, not because they aren't allowed, but because rules are designed to capture the base case, so most cases are anticipated by the rules.
This is why most reviews and reporters do not list every banal dispute.
>If the law is wrong (or even if the spirit/intent of the law does not apply here), she should win and the law should change or be struck down.
That's orthogonal. What you propose translates to that while the law is not changed (which can take decades in some cases) we should let people suffer rather than "skip technicalities" when we can.
How about sodomy laws (still present in some jurisdictions). Should they be imposed upon gay men until those laws change? And no biggie if people suffer in the meantime?
> That's orthogonal. What you propose translates to that while the law is not changed (which can take decades in some cases) we should let people suffer rather than "skip technicalities" when we can.
You misunderstand me. I am saying if the law is wrong, she should win (and so should everyone else, every time, while the law is wrong). I am also saying if the law is wrong, it should change or be struck down. I am not saying she should lose until the law is changed.
By making it easier to change the official winner future people might suffer much more if it becomes easier to challenge an award.
Just as a practical matter, people are more likely to litigate an award _before_ the award is disbursed. "Dumb" rules that require an entity to disburse funds to a specific named person contingent upon some simple formality have actually arisen because more robust rules that carefully balance interests and facts (including fraud) can create too much litigation. Those more robust rules are important to keep, but sometimes simply deferring a challenge until after disbursement can cut down on the amount and overall cost of litigation. For one thing it completely removes one of the 3 parties; in this case the agency administering the lottery.
For example, there are rules (legislative and court made law) for things like life insurance policies and bank accounts that require the entities disbursing the funds to pay directly to a named beneficiary, even if ownership of those funds could be and actually is being challenged in, say, probate court. And you can't circumvent the rules by asking a court to change the named beneficiary; that would defeat the whole purpose of the rule, and courts normally won't do that even if they know that, ultimately, the challenger will ultimately be given the funds.
That's the question here, whether the rules being challenged here are the kind of rules intended to prevent litigation that ropes in the agency administering the lottery. If so and the court makes an exception here, it would be difficult if not impossible to prevent other scenarios where challengers try to force the agency to change the name of the winner rather than directly suing the winner after disbursement. The former is often less costly for the challenger and could easily invite more litigation that challenges rightful ownership of a lottery ticket.
However, for your "Forbes" example the law makes a distinction between a public person and a private person.
Many many "private" people successfully sue Forbes to get off their annual "kidnap and ransom" list. The key to being declared a private person is never making public comments or speeches, etc.
Many many "private" people successfully sue Forbes to get off their annual "kidnap and ransom" list.
Citation needed. Something like that would be pretty big news, especially considering that Forbes will voluntarily redact names of individuals from their list if requested, no lawsuit required.
Did the lottery ticket have an EULA on it giving all the conditions of the win? What was the mechanism in place making sure that the purchaser fully understood the provisions of the agreement prior to making the lottery purchase?
Are you siding with the state on this merely because it's a state? Would you feel the same way if it were microsoft?
> Are you siding with the state on this merely because it's a state?
No, and I definitely don't side with the state because it was in the rules. To me, what's legal matters, not what you signed away. When I say "opt in" vs "opt out" I am talking about the known inherent risks of publicity, not about whether you can change the name you sign or other fine print. I am just conceding the argument for transparency has merit.
I'm with you, but mostly because I hate the lottery system and think it's a shitty mechanism for the state to extract even _more_ money out of the poorest and most destitute by preying on their hopes and dreams. Not to mention, it's very possible it's being used as a mechanism for organized crime: http://www.pennlive.com/watchdog/2017/09/defying_the_odds_pa...
re: redacting names from Forbes lists and the like - and if it did? What is the point of said lists beyond a congratulatory pat on the back for those who want it?
In this particular case, there is precedence where winning has been detrimental to the winners specifically for the sake of winning (scams, murders, etc.). I think that substantially outweighs the "need" for transparency of the lottery system to seem above board. Just continue to highlight where the ticket was sold and that it was a John/Jane Doe unless the person wants to opt into disclosing identity and call it a day.
This assumes you trust your government to actually award it to someone and you trust the ones running the lottery that who it was awarded to happened actually by chance. Because you'll never be able to investigate either without making the information available to someone outside the government (and even then, do you trust an "independent" auditor?). Transparency in government actions has value sometimes, even at the detriment of individuals. But it's not at all costs and I do agree a balance could be found between the public's right to know and scrutinize and a person's right to privacy.
while that is very true, but what guarantees do I have that the people winning it publicly aren't actors, friends/family of lottery workers, etc.?
If I'm willing to pony up money at absurd odds for a chance to win a larger stack of money, honestly, I don't know how much private/public disclosure of winner is going to affect that. People go to casinos to gamble where the games are inherently stacked against you yet continue to do so.
I just think it is a concern for transparency that need not be there, honestly. Obviously, that's just an individual's opinion, but I don't think it benefits to the degree is assumed. There are some states in which you can win anonymously, and their lotteries are doing fine.
I don't think it was that transparent. She followed instructions that she was given by the commission and the result was not what she wanted. She could have put the name of the trust on the ticket instead of her own name, but she was given bad advice by the official website.
> If this was thrust upon her, I might feel different.
While it’s not thrust upon her in the sense that someone held a gun to her head to force a ticket purchase, her options are severely limited due to state’s monopoly on lottery business. If some entity (including another state) came up with an anonymous lottery system to serve such market, most likely she would not be able to legally purchase such tickets in her home state.
> If you are really paranoid, you might consider picking another G7 or otherwise mainstream country other than the U.S. according to where you want to live if the United States dissolves into anarchy or Britney Spears is elected to the United States Senate.
Ah, 2014. Such a bright, optimistic time to be alive.
I really disagree with the common advice to take the lump sum - unless the winner is elderly. It seems to be centered on the idea that you can earn more interest/dividends yourself, but there are a few problems with that.
1. To get higher rates of return, you expose yourself to more risk of losses. The risk is real, i.e., you could lose everything.
2. You need even better (riskier) returns to pay for all the legal/investment/accounting advice because lottery winners rarely have experience here, at least not in the first year.
3. You need even better returns (and more risk) to make up for the taxes you pay up front. The annuity is based on pre-tax funds, and federal tax is much higher than the 25% initial withholding.
4. A $2-3 million windfall is more than enough to live on a sensible six-figure budget and get some practice with investing. If you screw up, you get another windfall next year. Just avoid debt.
5. Will taxes go up in 10 years? Who cares. They won't go to 100%. Even if you lose everything for 9 years straight, you'll still be rich in 10 years with far more certainty than if you took the lump sum. Just stay out of debt.
You are ignoring political risk eg in 15 years that state government changes the rules and sequesters the money - this actually happened in the UK to the SERP pension I lost mine for a small uplift in the state pension when they changed the rules.
You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
> You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
The "now" and "later" lottery payment options do not offer equal nominal amounts, so it doesn't make sense to just say "you're ignoring the time value of money". The regular payment pays out more nominal money because of the time value of money. You could argue that they're getting it wrong, but that's a radically different argument.
Illinois has had difficulty recently paying lottery winnings to citizens. In 2015, 3900 winning tickets had delayed payouts [0]. Risk should always be factored into financial decisions, and risk of a lottery institution going insolvent is non-zero.
They did pay, but yes, nothing is completely risk-free. The risk of a lottery winner losing their lump sum to mismanagement, fraud, etc. is still a lot higher than the risk of a state going belly-up, although maybe Illinois will be the one to change that.
> You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
The lump sum is generally pretty close to what an annuity from a reputable company would cost, so the time value of money is already factored into it. Of course, you might prefer a riskier investment for higher returns, but that is really dependent on your risk tolerance, it's not a complete no-brainer to go with the lump sum.
Huh? You could still have all those benefits if you took the lump sum. Just put it in index funds and extract as needed. Stocks deemed too risky? Put it in bonds. It will still be better than the pathetic interest rate offered by the lottery's annuity.
If you win the Powerball tomorrow and take the annuity, you'll take home about $2 million after taxes. You can put $1 million in index funds and try to scrape by on the other $1 million for a year, by which time you'll be more knowledgeable and better equipped to deal with next year's slightly larger payout. I'm assuming the abstract "you" are a typical lottery winner and not an experienced and well-connected investment banker.
First, the withholding rate is immaterial, it's clearly not enough to meet the tax obligations, you'll owe much more, and should start paying quarterly estimated taxes right away.
Because the annuity is pre-tax, the annuity payments will be taxable. There is some positive tax benefit of spreading the income over many years, because you have a lower marginal tax rate on the bottom of the bracket, but if the annual payments are $2-3 million, there's still a large amount taxed at the maximum rates.
In addition, if you take the lump sum, and invest it, your gains will likely be in the form of qualified dividends, and long term capital gains, which have more favorable tax treatment. If you invest in tax-exempt bonds, you won't pay any tax on the bond payments (but can still have taxable capital gains or losses on the bonds themselves).
The behavioral factors are much more compelling.
I would also take issue with 2; you can take the lump sum and dump it in a Target Date 2030 fund, and be done with it. It's not tax optimized, but whatever, it's easy and done. Yes, you need an estate attorney to help you draw up wills and/or living trusts, but that's not a big deal either. Also, get a big umbrella insurance policy to cover whatever. Because there's no way to shelter the lump sum (or annuity) payments from taxes, and because future capital gains will have preferential treatment, there's not much reason to spend a lot of effort on heroic tax avoidance. You probably need to spend a little bit more on legal advice when you take up new ventures than you would otherwise, but that's only needed when you take up the new venture.
The main reason to take the lump sum is if you want to do things that cost more than the annuity. For example, starting a company, purchasing a company, running a political campaign, giving a large donation (e.g. endowing a position at a university), etc.
Those are just a few of the ways a typical rags-to-riches lottery winner (with tons of encouragement from an entourage of friendly and helpful advisors) is likely to end up broke in 10 years, and exactly why I'd expect the annuity to be more profitable for them in the long run.
That Reddit thread is really great. One idea they don't mention is that perhaps the extreme transparency of winning the lottery should include anyone who begs for money. That is to say, the lottery winner should bring a camera with them everywhere they go, film every beggar and harasser, and post all the footage on YouTube. This would of course require a good bodyguard or two.
I think that's what I would do. When someone is about to start their pitch, I would tell them the rules: if you pitch to me, you must do it on camera, in public. Otherwise, I'm calling my bodyguard.
Except the biggest problem will be friends or family that suddenly all “need help” because they spend their money frivolously or suddenly their car breaks. That or you get totally pushed out because you weren’t generous enough.
My mother-in-law got an accident settlement 20 years ago. Suddenly, foreign "relatives" she'd never met were calling her for handouts (and that's besides the relatives that she knows who were asking).
Yeah, that. It always amazed me that Eric Schmidt spent millions every year on personal security for himself and his family. But the reality is that for some people it is "easier" to find someone with money and force them to give it up than it is to get the money legitimately.
The comments about family really resonate. I did not realize that so many of these folks were being killed by family members, that seems a bit extreme.
I don't think she did know what she was getting into or else she wouldn't have signed the back with her name. I didn't know you basically had to get outed or setup an anonymous trust etc.
If nothing else, this story and court-case will make this information more commonly-known. Before/when you win millions, setup a trust and let the trust do the winning.
She still has the choice to refuse the money. She can't have both in this case. Sometimes the world isn't fair. I really wish to hear other people talk about the "threats to liberty this entails" because I'm being down-voted to oblivion.
You're right, but the fact is she could have been anonymous if she'd known about "this one weird trick to maintain your privacy" (i.e. setting up a trust).
Cases like this (1) call out non-obvious legal stipulations for the majority of us that don't read/understand every bullet-point of a TOS and (2) question the legality of such stipulations.
I understand the desire to be anonymous, but things like this get out. While taking this route might benefit future winners, it will likely make her own situation worse via the "Streisand effect": https://en.wikipedia.org/wiki/Streisand_effect
I honestly don't see the issue. The only reason the lotto works is because people know you can win and it's not rigged, and the only way you can know that is by making the winners public. Finally, the only reason said lottery was $XXXM is because of the people who tried and failed, funding it. I doubt lotteries would pay such large amounts long term if anonymous lotteries were standard as fraud is inevitable.
Being able to take half a billion dollars of free money anonymously and safely is hardly a right. I mean, you could simply not take it.
Because, and I'll quote from article, "she signed her name on the back of the ticket shortly after winning, and altering the signature would nullify the ticket." That is, she could have formed an anonymous trust, but now it's too late.
This is completely unrelated to the question you're supposedly responding to. Some people are advancing the argument that it serves an important societal interest to publish this woman's name. Specifically, it builds trust in the lottery by publicizing that somebody won.
bachmeier is pointing out that you could accomplish this equally well by making up a name and publishing it as the lottery winner. The fact that somebody signed a ticket has no bearing on that.
The only reason the lotto works is because people know you can win and it's not rigged, and the only way you can know that is by making the winners public
The lottery works because people are driven by hope and are bad at (or don't care about) math. No one goes around verifying that the people who won the lottery actually get their money.
Why would fraud be inevitable if you were allowed to form an anonymous trust before claiming your winnings? You still have to produce the winning ticket. What new vector for fraud does this open up? If the people running the lottery are corrupt, it wouldn't seem they need to use anonymous trusts to siphon off money.
Sure. It's also fair for her to challenge this clause given that the revelation of her win would probably completely destroy her existing relationships. It's fun to dream about winning hundreds of millions of dollars, but I'm glad this woman is taking the likely consequences of the win seriously and doing what she can to protect herself.
Ultimately, state sponsored lotteries like this are a bad thing for everyone: the winners, the losers, the taxpayers, the government, and society at large. So if she can win this case and that in turn makes lotteries less popular or uneconomical, then that's a good thing for the culture.
Why are they a bad thing for everyone? Obviously the players are almost universally worse off for playing, but don't they generate tax revenue and funnel money into places like schools?
Lotteries are often dedicated to funding schools. But the schools were going to be funded anyway. What ends up happening is the lottery pays for its own staff, the school budget stays the same, and money that would have gone to schools goes elsewhere in the government budget. In this stylized example, is that extra money in the non-school budget funded by surplus from the lottery?
What would it mean for the lottery to funnel money specifically into schools?
Presumably that rule was in place when she played, so I don't see why she should win. Even if I sympathize with the desire to not have all of humanity know you're now worth hundreds of millions of dollars.
Aren't court proceedings public record? Her name would come out that way even if she wins. Can she grant another person the authority to sue on her behalf and remain anonymous?
The lottery/state officials' story seems to be somewhat at odds with itself.
They say that they have to be open (makes sense) but they also allow you to claim via an anonymous trust, but she can't do that because she signed it. Feels like they could privately identify her to make sure she's the name on the ticket and then do the public part via a trust.
This might not fit the way the relevant laws are written, but they can't say that they're fighting in the interest of openness by not allowing this but allowing the anonymous trust in the first place.
I think nebulous1 is is pointing out that it's one thing to say "We're just following the letter of the law to the best of our ability, because we want to be 100% above board." It's another thing to say "We're fighting in the interest of openness."
That is to say: don't pretend to be some white knight for principles when you're actually just trying to CYA. Be honest.
In the UK, the National Lottery allows anonymous retrieval of the winnings and yet there is still a very large amount of trust that there is no fraudulent activity.
The anonymity means you do not get financial advice from the lottery trust which seems like a pretty fair trade off.
Any UK winner can opt for anonymity when collecting their prize. The National Lottery give financial and legal advice regardless of your choice. Only around 20% opt for publicity.
The fact that there's a person with a different name than a lottery administrator shouldn't give you any additional confidence that that person isn't just a fake identity of the lottery administrator. Based on the stated facts, 0% are known for sure not to be fake identities of lottery administrators.
For example, family members of giveaway administrators are generally prohibited from winning, but how are you supposed to know who they are?
Given the size of the prize involved, it seems like she could have had a duplicate "winning ticket" made, sans signature on the back. This would have had to have been done before all the publicity about the signed ticket though.
Even with watermarks, etc., the cost to manufacture an exact replica ticket couldn't be more than a few thousand dollars. Even if it were $100K to buy some specialized equipment, it would still seem like a worthwhile investment.
What you don't realize are that your arguments here are actually anti-noncryptocurrency.
Transactions done only in the cryptocurrency have no such disadvantages, at all. Those are all issues with conversion to and from fiat, and thus arguments against fiat.
At some point, maybe not with Bitcoin, maybe not with Ether, but at some point, there will be a tipping point. Probably with the next country whose fiat fails (venezuela?)
Not sure what to say to that other than the Kool-aid must be good.
Here's the thing, i want to be able to pay bills and be relatively insured against losing to a con man.
Currency must be boring, reliable, trustworthy. Examples of the Wiemar Republic Mark, Zimbabwe Dollar and other examples of hyper-inflation are reasons why it must be consistent. Not 10,000 one day and 8,000 the next. That's gambling.
Right now CC is a non-starter as i can't get my daily needs met using it. It's a pyramid scheme full of shysters and people trying to get rich quick.
How do you vet that an exchange won't pull something ?
I want a boring finances. Yes there are issues with fiat but i can go, put a dollar in, come back and still have a dollar. Not 0 and some excuse "hacked!".
Related: I wonder if any analysis on the life outcomes of another jackpot system, "sold company for a windfall", have been done. I appreciate the bad lotto result stories because they confirm my correct bias that lotto should not be played because it is a tax on not understanding probability (except at about 350M for powerball, in which case your enemy is not expected value but variance). However, no such analysis seems to have been done on the startup ecosystem, which generally relies on big exit stories for 'free marketing'.
As somebody who lived as a professional gambler for a while, I would agree that your assessment of value of most lotteries is correct: they are poor value and should be avoided.
However, we're not expecting people to deploy Kelly criterion here, nobody is playing lotto for EV and a need to maximise returns on known value parameters.
But I play lotto. And I know all this more than most. I have literally paid my rent with money earned from understanding this and exploiting it. WTF am I doing playing poor odd games?
When you're playing $5k to win $5k on something where you think true odds are more like 55% in your favour, you are doing so most likely knowing $5k is 10% of your total bank (based on Kelly), and that you're 45% likely to lose. You're going to hopefully play over and over again and in the long run make money.
When you're playing $2 to win $100m, do you actually care?
The $2 is likely such a tiny part of your bank that you could literally lose it down the back of the sofa and not care, but the payout is so large and life-changing, that not having access to that very remote possibility - given the cost is so tiny and marginal and unnoticeable - is short-sighted.
Yes, the maths don't work from a probability angle, but arguing that playing the lottery is a tax on ignorance is juvenile and short-sighted. Optimising your bank at that level is like trying to make sure you don't leave a single grain of rice on your plate at dinner.
The maths of starting a business are pretty harsh, the costs of failure are higher and yet still, many people choose to do it. Are they fools? Perhaps. But they consider the cost and potential payouts to be worth it.
What would be helpful in this discussion is a report on lottery spending per capita, sorted by income level and other demographics. Currently I'm not finding any out there. I do see a study showing that the average amount spent per person in the US is around $200ish (https://lendedu.com/blog/lottery-study-report/), which doesn't sound completely terrible. However, it is very probable that this number masks widespread differences in spending habits.
I do find it problematic that states lean on a gambling game for revenue that (due to the population distribution of typical lottery players) acts as a defacto regressive tax. There's a side of me thinks this is rather exploitative, particularly with the evidence that lottery advertising is strongest in poor neighborhoods. (https://www.wsj.com/articles/powerbull-the-lottery-loves-pov...)
With the recent emphasis in America of pooling together multiple states and tweaking odds to produce these headline-grabbing 9 figure jackpots, one other complaint: it's pretty clear to me that American lotteries fail to prepare winners for the "consequence" of winning... that is, the huge amount of financial planning and protection (even lifestyle and location changes, I'd say, along with how to handle relationships with people you know), that is necessary for having a public-known 9 figure asset base. Even lotteries that reward 6 or 7 figures may come with some shocks, but leaping to that sort of base is a whole other sort of ball game.
> I do see a study showing that the average amount spent per person in the US is around $200ish (https://lendedu.com/blog/lottery-study-report/), which doesn't sound completely terrible.
i feel like that's pretty bad, next to an article like:
Is that annual? If it is anything like any other vice, basically it follows the pareto principle, causing massive damage to a small subset of the population which does most of the overuse. "Don't bet the rent money" very much applies here.
I never said the word 'ignorant' nor did I say anyone was a fool. I said 'not understanding'. If someone doesn't understand chess, I don't call them a fool, I just point out they are not trained in chess. Also to your point about grains of rice, I think the world would probably benefit from everyone purchasing the optimal number of grains of rice, and eating that number of grains of rice. Food waste is a problem, as is the belief that 2 dollars here and there doesn't add up.
Overall yes, but each startup is unique, and requires work and certain character traits and developing one cultivates talents, skills, connections, and business intelligence.
Each lottery ticket purchased is a no-skill crapshoot. People who are attracted to it tend to be looking for short cuts in life, not rolling up their sleeves for the hard and uncomfortable work of entrepreneurship. And unlike a startup, the lotto confers no personal benefits along the journey even when it fails.
The first part of your post is a great point. Building a startup, like studying hard in college, builds character/skills/talents/networks/knowledge that might be valuable to you in future endeavors.
These traits 1) help soften the downside of "losing" the "startup lottery" (making it non-analogous to the actual lottery in pure mathematical terms). And 2) perhaps also might help explain any measured difference in outcomes between startup founders and lottery winners.
But the "People who are attracted to it..." portion of your post doesn't seem necessarily true and is a pretty harsh/puritan attitude. Do you have any hard empirical data supporting these claims?
Defore testing this claim, and for your own sake, we should investigate parent's original question: do we see a similar pattern with startup "winners"? Because if so, your reasoning here might have disturbing entailments for the entrepreneurial set ;-)
I will bookmark this, and hopefully someone updates the story of what happened when the case has been settled.
On one side, you can see why the lady was asking for anonymity - exposing her could really endanger her life. She would be a target for anyone, who would want a piece of that $500 million dollars of reason. On the other side, you see that the state wants to advertise and use this as a marketing ploy to entice other people to play.
I wonder if she can have her name legally changed prior to picking up the ticket, and then changed back afterwards. I'm not sure if the signature on the back matters in that case.
This reminds me of a very, very complicated episode of 'Nathan For You' (a phenomenal show for those unfamiliar) - where he pays someone to legally change their name to a celebrity's name in order to open up a fake bank account with said name, then go into a restaurant and fake a "celebrity big tip" scheme to bring the restaurant some needed PR.
But there's a snag! Nathan's lawyer lets him know he has to legally announce the name change in a circulated newspaper. This might draw attention to his scheme, right? So in order to get around that, he creates a fake newspaper, and circulates it around a handful of major cities for four weeks to make the name change announcement.
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[ 5.6 ms ] story [ 327 ms ] thread"The state allows people to form an anonymous trust, NewHampshire.com reported, but it’s a moot point for the woman — she signed her name on the back of the ticket shortly after winning, and altering the signature would nullify the ticket."
Oh and an excellent tidbit out of the story is that the attorney representing her actually blogged about the winner having been in NH and how the winner should not sign the back of the ticket. Apparently the ticket winner is now using that attorney to represent her in the courts. https://www.shaheengordon.com/New-Hampshire-Legal-Blog/2018/...
Looks like some lucky person was smart enough to do that.
"In 2016, the last winner of the Powerball followed that advice. The $487 million prize claimed through the Robin Egg 2016 Nominee Trust, which was created by Shaheen, and he serves as its trustee."
Signing the back upon purchase is a strong defense against this fraud. So it's not as black-and-white as it seems.
Additionally there is a self scan kiosk where you can check your ticket. And there's always publicly listed winning numbers.
Most lottery systems around the world will buzz a "winner" or "not a winner" sound and some flashy lights when you bring the ticket to a clerk. Try it in Germany, England and USA (places where I played lotto and witnessed it firsthand)
http://wfla.com/2017/12/12/gulfport-and-st-pete-store-clerks...
(and yes, a lot of systems now have self-service terminals that one can use to check your own ticket, and cashier terminals that make audio, but fraud will always find a way.)
Even an online article?
Were you looking for a paper copy? I don't have your mailing address.
But doesn't this mean if someone can assault you and steal the ticket they can claim it themselves? Sounds like both have risks :/
But, why? Because she accidentally signed the ticket before realizing that it invalidated that option? She holds the winning ticket, just let her redact her signature from it legitimately and claim her winnings.
It sucks for this woman, but technically she could always forgo the winnings altogether. Nobody is forcing her to take the money, or to keep it. She wants to have her cake and eat it too. What's she's asking is reasonable on its face, but there are larger considerations at play.
The legislature is still free to address this woman's concerns directly, as well as for future winners. Ideally that's what would really happen. Maybe she should pledge some donations to her friendly neighborhood representatives.
But that’s shouldn’t be the question. The question should be whether that law is extremely dumb (obviously it is), and whether it threatens to place undeserved stress on an individual going through a major life event (it does).
On the other hand, I understand why lotteries want to publicize winners in their marketing.
A fair deal might be, that the publicity value is defined to be X% (say 10%) of the prize, and you can take the full prize with publicity, or the prize - X% anonymously.
https://www.nbcnews.com/news/us-news/programmer-pleads-guilt...
https://en.wikipedia.org/wiki/McDonald%27s_Monopoly#Fraud
>In 2000, the U.S. promotion was halted after fraud was uncovered. A subcontracting company called Simon Marketing (a then-subsidiary of Cyrk), which had been hired by McDonald's to organize and promote the game, failed to recognize a flaw in its procedures. Chief of security Jerome P. Jacobson[3] was able to remove the most expensive game pieces, which he then passed to associates who would redeem them and share the proceeds. The associates won almost all of the top prizes between 1995 and 2000, including McDonald's giveaways that did not have the Monopoly theme. The associates netted over $24 million.
The whole thing places lottery winners into a dangerous situation, and everyone knows it. That's why the stereotypical "change your name and move" advice is so often recited.
It is ludicrous that it would take a judge more than a few hours to review the law and make a decision to allow her to change the ticket to an anonymous trust.
It's OK to stay anonymous, particularly in the largest lotteries (National Lottery and Euromillions, both operated in the UK by Camelot Plc), and you can not be publicly named without opting into it.
It's my understanding that every person who gets a prize over £500k on the national/euro lotteries gets a visit from a Camelot employee to ensure they're prepared to handle the money and are speaking to suitable people who are not going to destroy their good fortune.
I don't see why other lotteries in other countries can't do the same without the risk of fraud increasing.
It can also prevent a spouse or common law partner from winning the lottery in secret and taking off with all the money. It's happened more than once in Ontario, Canada, with one story making the rounds right now.[1]
[1] https://www.thestar.com/news/queenspark/2018/02/06/woman-sue...
In that case, I should tell you about my dynamite idea for a startup. It's called... umm..... Uberbookchain.
It seems like this individual is doing a tremendous public service by taking this to court. I think most of us would balk at the risk of somehow losing the millions of dollars.
Or do we now need an IQ test before certain types of activities can be enjoyed?
How does releasing someone's name and location even avoid fraud within itself? It only works if people invade that individual's privacy (e.g. job, associations, etc).
What's free about it? They will advertise the win one way or another, just in this instance using a verifiable name of an individual.
That might make the advertising more believable or relatable and effective but doesn't make it 'free'.
https://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_...
Winning the lottery (publicly, at least) seems to be a real monkey's paw wish.
Think we can assume none of it is true. Seems a bit alarmist. At most its no different than what any other wealthy person has to deal with. Welcome to being rich.
I'm not sure I do. She opted into a transparent system and gets the down side that comes with it (or opts out). If this was thrust upon her, I might feel different. I fear the precedent this would set for redacting names from Forbes lists and the like. It's one of those unfortunate occurrences where openness and privacy are in conflict and when it's government actions like this, arresting someone, awarding some other monies to someone, etc I think openness should prevail.
I mean come on, that’s such a petty technicality for such a massive life event. Just let her set up the anonymous trust and move the ticket to it.
And in as much as courts can make and change laws, they must do so on principle, almost always by applying or extending some pre-existing principle of law. It can be difficult to articulate a principle cabined to the particular facts of a single case. It's much easier for legislatures to do that--to craft a rule that literally recites the facts of this woman's case so that the exception only applies to her and to people facing her exact same circumstance.
Maybe the court can do that in this case. We just shouldn't make the mistake of thinking it's an easy case to resolve.
Junior judges are more reticent to rock the boat - they have less resources, less understanding of how the judicial boards and other oversight mechanisms work, etc. Old greybeards generally stop caring - either about bothering to change things or about how 'safe' their ruling will be on appeal. The most active in tossing bad precedent out the window generally end up being the ones that get appointed to higher ranking courts.
The state gets their substantial cut--both through the lottery itself and through taxes--either way. Without having looked into the history of lottery practices, I'm pretty unconvinced that winners need to be outed to collect their winnings.
Equitable relief is precedent-setting, and derives from the basis of "whoa, our rules feel 'off', lets give this person a break".
If you want the precedent to be narrowly used, you just write a ruling that makes it clear that the outcome is exceptionally fact specific.
Which one would you suppose a ruling on this falls under?
The latter hopefully/clearly. But I don't consider it activism to uniformly apply your interpretation of the law. The activism I was concerned about is narrow application in this supposedly "exceptional" circumstance. Is that a "third form" or is it an extension of the first except they carved it out for someone else?
Why not? This is a core facet of their job.
The tug of war in law between flexibility and certainty is nothing new.
In this case you've state the outcome should be either all entitled to anonymity or all restricted from anonymity. Why are those the only two options?
Say sociological research shows: 1) people conceal lottery earnings from spouses in the context of divorce with tremendous regularity, and 2) people who obtain lottery earnings are 10x more likely to be killed by distant, financially-at-risk relatives. Should a lottery winner with 3 violent felons with debts in his family be dealt with in the same manner as an upper middle class winner in the middle of a divorce?
This is why our judges get to tinker with our rules. Because real life has edge cases.
Real life also has preferences and bias. This is why our judges mostly do not get to tinker with the rules.
They mostly don't tinker, not because they aren't allowed, but because rules are designed to capture the base case, so most cases are anticipated by the rules.
This is why most reviews and reporters do not list every banal dispute.
That's orthogonal. What you propose translates to that while the law is not changed (which can take decades in some cases) we should let people suffer rather than "skip technicalities" when we can.
How about sodomy laws (still present in some jurisdictions). Should they be imposed upon gay men until those laws change? And no biggie if people suffer in the meantime?
You misunderstand me. I am saying if the law is wrong, she should win (and so should everyone else, every time, while the law is wrong). I am also saying if the law is wrong, it should change or be struck down. I am not saying she should lose until the law is changed.
Just as a practical matter, people are more likely to litigate an award _before_ the award is disbursed. "Dumb" rules that require an entity to disburse funds to a specific named person contingent upon some simple formality have actually arisen because more robust rules that carefully balance interests and facts (including fraud) can create too much litigation. Those more robust rules are important to keep, but sometimes simply deferring a challenge until after disbursement can cut down on the amount and overall cost of litigation. For one thing it completely removes one of the 3 parties; in this case the agency administering the lottery.
For example, there are rules (legislative and court made law) for things like life insurance policies and bank accounts that require the entities disbursing the funds to pay directly to a named beneficiary, even if ownership of those funds could be and actually is being challenged in, say, probate court. And you can't circumvent the rules by asking a court to change the named beneficiary; that would defeat the whole purpose of the rule, and courts normally won't do that even if they know that, ultimately, the challenger will ultimately be given the funds.
That's the question here, whether the rules being challenged here are the kind of rules intended to prevent litigation that ropes in the agency administering the lottery. If so and the court makes an exception here, it would be difficult if not impossible to prevent other scenarios where challengers try to force the agency to change the name of the winner rather than directly suing the winner after disbursement. The former is often less costly for the challenger and could easily invite more litigation that challenges rightful ownership of a lottery ticket.
However, for your "Forbes" example the law makes a distinction between a public person and a private person.
Many many "private" people successfully sue Forbes to get off their annual "kidnap and ransom" list. The key to being declared a private person is never making public comments or speeches, etc.
Citation needed. Something like that would be pretty big news, especially considering that Forbes will voluntarily redact names of individuals from their list if requested, no lawsuit required.
Are you siding with the state on this merely because it's a state? Would you feel the same way if it were microsoft?
No, and I definitely don't side with the state because it was in the rules. To me, what's legal matters, not what you signed away. When I say "opt in" vs "opt out" I am talking about the known inherent risks of publicity, not about whether you can change the name you sign or other fine print. I am just conceding the argument for transparency has merit.
In this particular case, there is precedence where winning has been detrimental to the winners specifically for the sake of winning (scams, murders, etc.). I think that substantially outweighs the "need" for transparency of the lottery system to seem above board. Just continue to highlight where the ticket was sold and that it was a John/Jane Doe unless the person wants to opt into disclosing identity and call it a day.
If I'm willing to pony up money at absurd odds for a chance to win a larger stack of money, honestly, I don't know how much private/public disclosure of winner is going to affect that. People go to casinos to gamble where the games are inherently stacked against you yet continue to do so.
I just think it is a concern for transparency that need not be there, honestly. Obviously, that's just an individual's opinion, but I don't think it benefits to the degree is assumed. There are some states in which you can win anonymously, and their lotteries are doing fine.
While it’s not thrust upon her in the sense that someone held a gun to her head to force a ticket purchase, her options are severely limited due to state’s monopoly on lottery business. If some entity (including another state) came up with an anonymous lottery system to serve such market, most likely she would not be able to legally purchase such tickets in her home state.
Ah, 2014. Such a bright, optimistic time to be alive.
1. To get higher rates of return, you expose yourself to more risk of losses. The risk is real, i.e., you could lose everything.
2. You need even better (riskier) returns to pay for all the legal/investment/accounting advice because lottery winners rarely have experience here, at least not in the first year.
3. You need even better returns (and more risk) to make up for the taxes you pay up front. The annuity is based on pre-tax funds, and federal tax is much higher than the 25% initial withholding.
4. A $2-3 million windfall is more than enough to live on a sensible six-figure budget and get some practice with investing. If you screw up, you get another windfall next year. Just avoid debt.
5. Will taxes go up in 10 years? Who cares. They won't go to 100%. Even if you lose everything for 9 years straight, you'll still be rich in 10 years with far more certainty than if you took the lump sum. Just stay out of debt.
You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
The "now" and "later" lottery payment options do not offer equal nominal amounts, so it doesn't make sense to just say "you're ignoring the time value of money". The regular payment pays out more nominal money because of the time value of money. You could argue that they're getting it wrong, but that's a radically different argument.
[0] http://money.cnn.com/2017/06/27/news/illinois-lottery-state-...
The lump sum is generally pretty close to what an annuity from a reputable company would cost, so the time value of money is already factored into it. Of course, you might prefer a riskier investment for higher returns, but that is really dependent on your risk tolerance, it's not a complete no-brainer to go with the lump sum.
First, the withholding rate is immaterial, it's clearly not enough to meet the tax obligations, you'll owe much more, and should start paying quarterly estimated taxes right away.
Because the annuity is pre-tax, the annuity payments will be taxable. There is some positive tax benefit of spreading the income over many years, because you have a lower marginal tax rate on the bottom of the bracket, but if the annual payments are $2-3 million, there's still a large amount taxed at the maximum rates.
In addition, if you take the lump sum, and invest it, your gains will likely be in the form of qualified dividends, and long term capital gains, which have more favorable tax treatment. If you invest in tax-exempt bonds, you won't pay any tax on the bond payments (but can still have taxable capital gains or losses on the bonds themselves).
The behavioral factors are much more compelling.
I would also take issue with 2; you can take the lump sum and dump it in a Target Date 2030 fund, and be done with it. It's not tax optimized, but whatever, it's easy and done. Yes, you need an estate attorney to help you draw up wills and/or living trusts, but that's not a big deal either. Also, get a big umbrella insurance policy to cover whatever. Because there's no way to shelter the lump sum (or annuity) payments from taxes, and because future capital gains will have preferential treatment, there's not much reason to spend a lot of effort on heroic tax avoidance. You probably need to spend a little bit more on legal advice when you take up new ventures than you would otherwise, but that's only needed when you take up the new venture.
I think that's what I would do. When someone is about to start their pitch, I would tell them the rules: if you pitch to me, you must do it on camera, in public. Otherwise, I'm calling my bodyguard.
The comments about family really resonate. I did not realize that so many of these folks were being killed by family members, that seems a bit extreme.
My dad grew up in the Great Depression. He used to say "The best way to double your money is fold it in half and stick it in your pocket."
If nothing else, this story and court-case will make this information more commonly-known. Before/when you win millions, setup a trust and let the trust do the winning.
Cases like this (1) call out non-obvious legal stipulations for the majority of us that don't read/understand every bullet-point of a TOS and (2) question the legality of such stipulations.
Being able to take half a billion dollars of free money anonymously and safely is hardly a right. I mean, you could simply not take it.
Seems fair to me. Am I missing something?
bachmeier is pointing out that you could accomplish this equally well by making up a name and publishing it as the lottery winner. The fact that somebody signed a ticket has no bearing on that.
Even looking at it now, while I can see that interpretation, it doesn't come easily to mind.
Thanks for pointing that out!
Rules rarely apply to rich people.
You have seen The Running Man, right?
This is such a loaded statement, in multiple ways, that I don't know where to start.
Why would fraud be inevitable if you were allowed to form an anonymous trust before claiming your winnings? You still have to produce the winning ticket. What new vector for fraud does this open up? If the people running the lottery are corrupt, it wouldn't seem they need to use anonymous trusts to siphon off money.
Ultimately, state sponsored lotteries like this are a bad thing for everyone: the winners, the losers, the taxpayers, the government, and society at large. So if she can win this case and that in turn makes lotteries less popular or uneconomical, then that's a good thing for the culture.
What would it mean for the lottery to funnel money specifically into schools?
Don't worry, the schools are getting their money.
See also https://www.legalmatch.com/law-library/article/filing-a-laws... or use your search engine of choice for '"anonymous plaintiff" lawsuit'.
They say that they have to be open (makes sense) but they also allow you to claim via an anonymous trust, but she can't do that because she signed it. Feels like they could privately identify her to make sure she's the name on the ticket and then do the public part via a trust.
This might not fit the way the relevant laws are written, but they can't say that they're fighting in the interest of openness by not allowing this but allowing the anonymous trust in the first place.
They don't want to be involved in that, but they're willing to use an externally valid mechanism, which they can't influence.
Personally, there was a way to stay anonymous, and she goofed it up. No sense in changing the system for someone who can't help themselves.
The lottery commission shouldn't be allowed to hide results.
That is to say: don't pretend to be some white knight for principles when you're actually just trying to CYA. Be honest.
Any UK winner can opt for anonymity when collecting their prize. The National Lottery give financial and legal advice regardless of your choice. Only around 20% opt for publicity.
For example, family members of giveaway administrators are generally prohibited from winning, but how are you supposed to know who they are?
Even with watermarks, etc., the cost to manufacture an exact replica ticket couldn't be more than a few thousand dollars. Even if it were $100K to buy some specialized equipment, it would still seem like a worthwhile investment.
Transactions done only in the cryptocurrency have no such disadvantages, at all. Those are all issues with conversion to and from fiat, and thus arguments against fiat.
At some point, maybe not with Bitcoin, maybe not with Ether, but at some point, there will be a tipping point. Probably with the next country whose fiat fails (venezuela?)
Here's the thing, i want to be able to pay bills and be relatively insured against losing to a con man.
Currency must be boring, reliable, trustworthy. Examples of the Wiemar Republic Mark, Zimbabwe Dollar and other examples of hyper-inflation are reasons why it must be consistent. Not 10,000 one day and 8,000 the next. That's gambling.
Right now CC is a non-starter as i can't get my daily needs met using it. It's a pyramid scheme full of shysters and people trying to get rich quick.
How do you vet that an exchange won't pull something ?
I want a boring finances. Yes there are issues with fiat but i can go, put a dollar in, come back and still have a dollar. Not 0 and some excuse "hacked!".
https://www.scambitcoin.com/blacklist/
https://www.google.com/search?q=%E5%BD%A9%E7%A5%A8%E9%A2%86%...
However, we're not expecting people to deploy Kelly criterion here, nobody is playing lotto for EV and a need to maximise returns on known value parameters.
But I play lotto. And I know all this more than most. I have literally paid my rent with money earned from understanding this and exploiting it. WTF am I doing playing poor odd games?
When you're playing $5k to win $5k on something where you think true odds are more like 55% in your favour, you are doing so most likely knowing $5k is 10% of your total bank (based on Kelly), and that you're 45% likely to lose. You're going to hopefully play over and over again and in the long run make money.
When you're playing $2 to win $100m, do you actually care?
The $2 is likely such a tiny part of your bank that you could literally lose it down the back of the sofa and not care, but the payout is so large and life-changing, that not having access to that very remote possibility - given the cost is so tiny and marginal and unnoticeable - is short-sighted.
Yes, the maths don't work from a probability angle, but arguing that playing the lottery is a tax on ignorance is juvenile and short-sighted. Optimising your bank at that level is like trying to make sure you don't leave a single grain of rice on your plate at dinner.
The maths of starting a business are pretty harsh, the costs of failure are higher and yet still, many people choose to do it. Are they fools? Perhaps. But they consider the cost and potential payouts to be worth it.
See the bigger picture from time to time.
and when it isn't a tiny part?
> Optimising your bank at that level is like trying to make sure you don't leave a single grain of rice on your plate at dinner.
many individuals playing the lottery are in a position like that, and frequently spend significantly more than $2 in hopes of winning.
> See the bigger picture from time to time.
...seriously? nobody cares if people like you or me burn a few dollars on a month on a lottery. the concern is for folks not in a position to do so.
I do find it problematic that states lean on a gambling game for revenue that (due to the population distribution of typical lottery players) acts as a defacto regressive tax. There's a side of me thinks this is rather exploitative, particularly with the evidence that lottery advertising is strongest in poor neighborhoods. (https://www.wsj.com/articles/powerbull-the-lottery-loves-pov...)
With the recent emphasis in America of pooling together multiple states and tweaking odds to produce these headline-grabbing 9 figure jackpots, one other complaint: it's pretty clear to me that American lotteries fail to prepare winners for the "consequence" of winning... that is, the huge amount of financial planning and protection (even lifestyle and location changes, I'd say, along with how to handle relationships with people you know), that is necessary for having a public-known 9 figure asset base. Even lotteries that reward 6 or 7 figures may come with some shocks, but leaping to that sort of base is a whole other sort of ball game.
i feel like that's pretty bad, next to an article like:
https://www.fool.com/investing/2017/10/01/why-half-of-americ...
Each lottery ticket purchased is a no-skill crapshoot. People who are attracted to it tend to be looking for short cuts in life, not rolling up their sleeves for the hard and uncomfortable work of entrepreneurship. And unlike a startup, the lotto confers no personal benefits along the journey even when it fails.
These traits 1) help soften the downside of "losing" the "startup lottery" (making it non-analogous to the actual lottery in pure mathematical terms). And 2) perhaps also might help explain any measured difference in outcomes between startup founders and lottery winners.
But the "People who are attracted to it..." portion of your post doesn't seem necessarily true and is a pretty harsh/puritan attitude. Do you have any hard empirical data supporting these claims?
Defore testing this claim, and for your own sake, we should investigate parent's original question: do we see a similar pattern with startup "winners"? Because if so, your reasoning here might have disturbing entailments for the entrepreneurial set ;-)
Her problem is not unique; any wealthy celebrity has had to deal with the same after all.
- Public + full money
- Anonymous + half money
Win-win for both parties.
On one side, you can see why the lady was asking for anonymity - exposing her could really endanger her life. She would be a target for anyone, who would want a piece of that $500 million dollars of reason. On the other side, you see that the state wants to advertise and use this as a marketing ploy to entice other people to play.
But there's a snag! Nathan's lawyer lets him know he has to legally announce the name change in a circulated newspaper. This might draw attention to his scheme, right? So in order to get around that, he creates a fake newspaper, and circulates it around a handful of major cities for four weeks to make the name change announcement.
https://www.youtube.com/watch?v=LU1U2Eyep_4