TYLER, Texas (KETK) – $1.35 billion is a lot of money, but it can be used up quickly or even taken by the government if you don’t handle it in the right way.
For the past few years, the lottery has been setting record-breaking jackpots.
Lottery officials said this has intrigued new players and kept existing players in the game.
If anyone is lucky enough to win on Friday, Gray Grief, the executive director of the Texas Lottery, said the first thing they should do is sign the back of the ticket, put it in a safe place and get help from professionals.
“Seek out the best legal and financial professionals you can find and get your affairs in order,” he said.
There is no rush. You have 180 days to claim your prize, but a tax consultant could be one of the firsts calls to financially set you in the right direction.
“They will have you create a business formation or a trust, something like that to make sure your money is moved so it’s not taxed at a higher percentage,” said Ashley Lewis with Ashroq Financial.
Once the winner knows what is going to happen with the money, it’s time to claim the jackpot.
The Texas Lottery takes out 24% of the prize money.
“Our primary beneficiary is the foundation school fund, and that is the fund that is administered by the Texas Education Agency,” Grief said.
Some of the money is also used to pay any debt the winner has.
“We also do a check of debts owed to the state of Texas things like student loans, child support. Anything delinquent we will deduct those from the prize as well,” Grief said.
Keeping your financial advisors informed would be crucial. If you start spending too much too fast, you might end up paying the higher price later.
“(They should) bring in that W-2G to be filed with their taxes and anything over 5,000 gets taxed at 24% along with all of the other gross income, so you could be looking at an addition tax bill,” said Lewis.
There is another option to take the cash option of $724.6 million before taxes.
If you win, you wouldn’t be alone. The retailer who sold you the ticket gets rewarded 10%.
That amount of money will go back into the business at the owner’s discretion.