Planning to win the Powerball jackpot? If you've already picked out your lucky numbers, you should also cross your fingers in hopes that you don't squander the winnings. Lottery winners are notorious for losing it all, as Business Insider reminds us.
Since you're obviously going to win the $600 million prize, here are five tips to make your jackpot last:
Create a trust. Trusts are estate-planning tools that can replace or supplement wills, as well as help manage property during life. Trusts create a "fiduciary" relationship running from the trustee, who's basically a gatekeeper, to the beneficiary. The trustee always has to act in the best interests of the beneficiary when dealing with the trust property. It's a great checks-and-balances system.
Make an impressive deposit in the bank -- and make it POD. Payable on Death (POD) accounts are simply bank accounts with an instruction that upon your death, the account shall be inherited by a beneficiary that you name, without going through probate. PODs very easy to setup. A shocking number of people don't have checking accounts, so if you're one of them, you'll want to set one of those up, too.
Pay your taxes. You'd be surprised by how many winners blow their winnings by not paying taxes. In general, the IRS counts lottery winnings as taxable income that must be reported. Prize checks subject to federal withholding tax will come with a Form W-2G to show how much tax was withheld. Many states also impose a state withholding tax ranging from 3% to 10%, according to the Tax Foundation.
Keep your health in check. All it takes is an accident or a major illness for the winnings to disappear, a columnist for NBCLatino.com writes. Practice self-control and resist becoming a lazy slob or over-indulging in drinking or smoking. Some lotto winners are also known to have a financial fatal attraction to gambling. Indulging a penchant for gambling that could slip into an addiction is simply not a bet worth taking.
Lawyer up. Money does strange things to people -- as does fame. With family, friends, charities, businesses, and sketchy people possibly jonesing for a piece of that impressive pie, it helps to have a neutral party cover your a$$et(s). Estate planning and tax law attorneys in your area can help you plan financially and try to prevent costly legal disputes.