The Mega Millions jackpot rises to $ 850 million. How to deal with unexpected luck

Once again, the Mega Millions jackpot has skyrocketed further.

The maximum win is now $ 850 million – the third largest in the history of the lottery – after no single ticket matched all numbers drawn on Friday night. Then there’s Powerball: your jackpot is estimated at $ 640 million for Saturday night’s draw.

Of course, the odds of winning any of the games are not in your favor: the chance of a single ticket matching all six numbers is 1 in 302 million for Mega Millions and 1 in 292 million for Powerball.

However, it is still worth considering how you would deal with such unexpected luck if you wanted to beat the odds.

Jackpot winners usually have six months to a year to claim their prize, depending on the state in which it was purchased. This usually means that it is not necessary to run to the lottery headquarters.

In other words, the winners must take a deep breath.

Whoever wants to hit one of the jackpots must be prepared for a roller coaster of emotions.

Experts say that once the initial excitement of winning the jackpot has passed, the magnitude of your windfall may settle.

“For anyone who experiences newly created wealth … there is a sense of displacement and a feeling of being overwhelmed,” said Valerie Galinskaya, managing director and chief of the Merrill Center for Family Wealth.

Of course, you don’t have to go alone.

Given the size of these jackpots, winners must assemble a team of experienced professionals – including a lawyer, CPA and financial advisor – to help them navigate the unexpected gains.

“You want to hire the right consultants who can provide not only good advice, but advice that meets your needs and wants,” said Galinskaya.

You must make a copy of your ticket, put it in a safe place – that is, a safe or deposit in a bank – and resist the urge to share your news with everyone in your life.

“Don’t talk to people about it right away, except for your immediate and trusted family,” said certified financial planner Jim Shagawat, a New Jersey-based partner consultant with AdvicePeriod in Los Angeles.

In addition, you must protect your identity when claiming the jackpot, if possible. Although the standard advice is to sign the back of the ticket, it can interfere with anonymity if state laws allow you to create a trust or limited liability corporation to claim the unexpected profit instead of doing it in your own name.

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If your state’s laws require your name to be publicly announced, it is worth preparing how to respond if others mention your windfall in a conversation, Galinskaya said.

“You say, ‘I’m very grateful and we’re still trying to figure out what that means for us,'” she said.

For the Mega Millions $ 850 million jackpot, the cash option – which most winners choose instead of an annuity – is $ 628.2 million.

Before that gets to you, however, 24% – or $ 150.8 million – will be withheld for federal taxes. You can also count on much more debt to Uncle Sam due to the higher 37% marginal rate applicable to income above $ 523,600 for individual taxpayers and $ 628,300 for couples filing jointly. State taxes are also normally due.

For the Powerball $ 640 million jackpot, the fixed amount option is $ 478.7 million. The 24% retention would be about $ 114.9 million. And again, more would be due.

One way to reduce your tax bill is to think with charity. Basically, the government offers a tax break if you use private money to do public good.

“It’s not just about what you want to do for yourself and your family, but also philanthropically,” said Galinskaya.

You can contribute in cash, up to 60% of your adjusted gross income, to a public charity or a donation fund and obtain a tax deduction in the year you make the donation. You can also create a private foundation, donate revenue to it, and, over time, determine how to use it.