It's important to understand that a winning lottery ticket should be treated like cash. Further, if you should lose that ticket, the finder has every right to keep it, unless you have signed the back. To avoid any problems associated with this, you should make a practice of signing the back of your lottery tickets immediately after you purchase them. Winning tickets should ideally be stored in a safety deposit box, however if getting to the bank presents a problem, then a home safe should be just as secure.
Above all, do not tell anyone of your windfall until you have had time to contact an attorney. It's important to realize that as soon as word of your win gets out, you will be besieged by "friends" and long-lost relatives looking for a share. Further, it's entirely possible that burglars may stake out your home and wait for you to leave so they could break-in and search for the ticket.
Consider Your Options
After you have secured your ticket, it's time to carefully consider your next steps. Understandably, you will be anxious to get the ticket into the hands of the lottery authorities, but before you do so, you should spend some time thinking about your options; just don't take too long as most states require winnings to be claimed within six months of the drawing date.
In general, there are two payment options: a lump sum and annual installments lasting 20 to 25 years. What many people don't realize is that when a lump sum payment is made, the IRS will automatically withhold nearly half of the total prize for taxes. Likewise, 28% is typically deducted from the average installment payment for taxes. Because of this, many people elect to take their winnings in the form of a lump sum payment so that they can invest a larger principal and keep their earnings stream going well beyond the time the installment payments would ordinarily stop.
Maintain the Status Quo
As tempting as it may seem, resist the urge to make drastic changes in your life until you have the chance to see how your newly acquired wealth will really affect your life. If, after a year you find that you can comfortably live on your winnings, then consider quitting your job if that is something you would like to do. Just remember, you will need to make other arrangements for health insurance and retirement savings.
Additionally, do not make any promises to another person or organization for financial help for at least the first year. Again, while winning a million dollars may seem like enough to make all your financial wishes come true, the reality is that you will receive only $36,000 per year. Rather than make a promise you find you won't be able to keep, it's best to see what your final payout will be before committing the money to others.
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