Jerry Taylor explains how lottery winners can use trusts to protect their winnings from taxes and scams. Setting up an irrevocable or revocable trust before claiming the prize keeps the winner's name private, shielding them from solicitations. The trust also lets winners name beneficiaries to receive any remaining payments after death.
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If you've won the Powerball or the Mega Millions lottery, or you plan to, you need to know how you're going to protect that money from a tax planning aspect as well as asset protection strategies. Learning about these strategies before you take your winnings is critical. These strategies may include setting up an irrevocable trust as well as a revocable trust and an annuity. One of the biggest benefits of setting up a lottery trust is anonymity. Only a handful of states allow lottery winners to remain anonymous. When you create a trust and put your lottery winnings in it, only the trust name and the trustees' names become public. Remaining anonymous in this way prevents everyone from approaching you for cash and to scam you. You can still tell anyone you want and you can still give money to anyone you want, but this prevents the entire world from coming knocking at your door. You will name beneficiaries to your trust, which just means that if you were to die before you received all the payments from the lottery, remaining payments would go to your beneficiaries as they come in. If you're unmarried,
