With every ginormous lottery jackpot comes the inevitable stream of articles discussing the tax implications of such a windfall.
Yes, someone who wins a gazillion dollars will probably need a small platoon of financial advisers to make the best decisions possible with regard to their dumb fucking luck, but the best part about winning a gazillion dollars is that you don't have to figure any of this out! You can pay any number of CPAs, attorneys, and wealth preservation experts to help you, so every website with a pulse is throwing out droll like this:
Two lucky winners in Arizona and Missouri will be able to claim the record-shattering $580 million Powerball jackpot after Wednesday night’s drawing, but they will also face taxes and need financial advice.
Experts say that the first thing a lottery winner should do is sign their ticket, put it in a safety deposit box and consult a financial advisor or attorney before stepping forward to claim their winnings. It would also be a good idea to check with an accountant and tax planner, especially with tax rates scheduled to rise next year unless Congress and the White House can agree what to do about them.
And you don't have to go to Ed Jones or H&R Block, either! You can get the best advice money can buy! Just think of all the elaborate entity structures and trust planning you could do! Generations of entitled brats will be able to reap the virtue of someone's decision to buy some Quick Picks with that 24 ounce can of Miller Lite if you adequately plan for it!
And don't forget the estate planning strategies and state and local issues!
If the shock of winning is unfortunately heart-stopping, the winner's heirs would be faced with a current estate and gift tax rate as high as 35 percent for 2012 with a $5.12 million exemption amount. And, unless Congress acts to extend the current rules, the maximum estate tax rate will jump to 55 percent with a $1 million exemption rate starting in 2013.Other considerations include state and local taxes, which will likely take the winnings down even further. And investing comes into play also as investing will get more costly under the fiscal cliff: the winner can expect to be paying higher capital gain rates as of 2013, when the maximum capital gains rate under a fiscal cliff will increase from the current 15 percent to 20 percent.
THE FISCAL CLIFF IMPLICATIONS! Dear God, that is something you damn sure better be aware of if you're three times luckier than some person that got struck by lightning. The fiscal cliff! SO IMPORTANT.
Meanwhile the winners are too busy thinking about shitty sports cars, hookers, and lifetime tickets to the Super Bowl. Sensible tax and financial planning has NO PLACE in realm of mega-jackpot lottery winners. Spare us all the Suze Orman wisdom bullshit; these people are millionaires a couple hundred times over and if they decide to invest in NASCAR commemorative plates, their cousin's classic car restoration business or their best friend's bar, that's what they should do because this is America. And in America there's nothing better than someone reaping wealth by the virtue of pure luck and then pissing it away, having everything come crumbling down in spectacular fashion only to get rich making a reality show about it.
How's that for a plan? Good luck, stupid lottery winners. You're on your own.