The Powerball jackpot has ballooned to an estimated $760 million — the sixth-largest prize in the game’s history — and experts have tips on what the lucky winner should do first.
If you score the winning ticket, you’ll pick between one of two payouts: annual payments worth $760 million or a lump sum valued at $383.6 million, according to Powerball. Both options are pretax estimates.
The next Powerball drawing is Saturday at 10:59 p.m. ET, and the odds of winning the jackpot are roughly 1 in 292 million.
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Whether you choose the lump sum or annuity payments, you’ll be saddled with a hefty tax bill, including an upfront 24% federal tax withholding. But you’ll quickly reach the 37% federal income tax bracket, and the final bill will likely be millions more. (You may also owe state taxes on lottery winnings.)
Assemble a team of financial experts
Typically, lottery winners “don’t have the knowledge base to handle this large sum of money,” said Andrew Stoltmann, a Chicago-based lawyer who has represented several lottery winners. “It’s very similar to what we see with our professional athlete clients.”
That’s why it’s critical to find the right team of experts, including a financial advisor, accountant and attorney, he said.
The winner also needs to prepare for the “estate tax consequences” of the multimillion-dollar windfall, according to Warren Racusin, a wealth planning attorney and partner at Lowenstein Sandler.
For 2024, the federal estate tax exemptions are $13.61 million per individual or $27.22 million for married couples. But without changes from Congress, those limits will drop by roughly one-half in 2026 when provisions sunset from the Republicans’ signature 2017 tax overhaul.
“There are a variety of estate planning ideas and techniques that you can use to save on estate taxes and benefit your family,” Racusin said.
Saturday’s Powerball drawing comes roughly 2½ months since a single ticket sold in California won the game’s $1.765 billion jackpot. Meanwhile, the Mega Millions jackpot is back down to $92 million and the odds of winning that prize are roughly 1 in 302 million.
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