This is an interesting topic, here in Canada a group on 13 office workers have just won the second largest jackpot in Canadian history. That was enough to start up our own lottery pool again and with that came the discussion of lump sum lottery winnings. What are the options and is it really worth it to take the lump sum over the structured yearly payout.
I was surprised to learn that in the US some states don’t offer lump sum payouts on lottery winnings rather opting to go with a large one time payout. I guess it comes as no surprise that this opened the door for investment companies to come up with their own programs for capitalizing on lump sum lottery winnings and taking a chunk of the cash as profit.
With in our groups discussion we had a few questions about how the lump sum payouts actually work. I thought that I’d do a little research and find the answers myself. Below are the answers to our 5 questions about lump sum lottery winnings.
1. How much of the money do we get to keep, assuming a $1,000,000 winning?
Answer: I went online to get a quote from one of these investment companies and got a response back in 5 minutes, they really wanted my money. After a few questions they came back with the quote of roughly a 20% fee. That seems a bit high but I guess it is reasonable if they are forking out $800,000 cash. This is negotiable though as the lottery winners we are in control, there are many companies that what this kind of business.
2. Do we have to sell the whole amount all at once?
Answer: No, we can split up the lottery winnings payouts however we like. So we could sell 50% of the annual payments and still receive a large sum of the lottery winnings plus get monthly payments. The payment splits are really up to you and the investment people they seem to be pretty flexible.
3. What kind of fees hidden or otherwise are we going to have to pay?
Answer: Apparently none. The lender is responsible for dealing with the court fees and paperwork nothing else out of pocket for us. Sweet.
4. Can’t we just go to the bank and sell it to them?
Answer: Nope. They don’t do structured settlement payments. At least not at my bank, and my bank rep said most other banks won’t either as it is not a simple transaction. She also recommended that we get our own lawyer to go over the paperwork before signing anything. Smart lady, that’s why my money is with you 
5. What lottery#’s are we going to play to win all this money?
Answer: Quick picks, keeping track of everyones personal picks is a pain and so many people use the same low numbers (birthdays, anniversaries etc…) that you end up with a ton of duplicate numbers. Save your birthdays for your own personal tickets and keep them out of the group numbers.
There you have if folks, the low down on lump sum lottery winnings. I seriously hope you have to reference this info once you win the lottery, just not on the same draw as me
