If you are the lucky winner of a state lottery, you have the option of selling all or a portion of your long-term lottery payments in exchange for a lump sum of cash. However, before you are able to collect your jackpot you must make an important decision: should you collect your winnings all at once in the form of a lump sum or should you defer and collect your payout in a predetermined incremental payment schedule. If you choose the latter and enter into a long-term payment agreement, your winnings will turn into a structured settlement that will allow you to receive years of periodic disbursements from an annuitized account that is put together by your state’s lottery commission. Unforeseen life events occur and unexpected bills can stack up over time though, and perhaps the structured payment you chose to enter into is no longer enough to cover your expenses. Lump Sum Funder is an expert at purchasing lottery payments over time in exchange for a lump sum now. Selling your payments gives you the ability to use your lottery winnings now, rather than waiting on payments in the future.
Selling lottery payments is simple when you work with professionals like Lump Sum Funder. You can contact us if you are ready to sell or if you are just considering what options are available to you. After speaking with you, our team of professionals can provide a no obligation quote for the payments you want to sell. After we reach the best solution for your lump sum needs, we will make the process of selling your lottery payments as simple as ever.
Reasons to Choose a Lump Sum Lottery Payout
Winners of large jackpots who consider themselves shrewd financial investors generally choose the lump sum payout option for several reasons. It enables them to beat the long term market returns that could have a negative impact on their overall payout. When individuals choose the large up front payout, they generally turn around and immediately put the money into proven high-yielding financial initiatives. These can include, but aren’t limited to land or real estate options, commodities, investments in precious metals, and bonds or stocks.
Reasons to Opt-Out of a Lump Sum Lottery Payout
The most obvious downside of choosing a lump sum of cash as a lottery payout is that the actual sum is significantly less in comparison than the stated amount that they won in the lottery. The federal government will apply an approximate tax rate of 39.6 percent to the stated winnings. For example, if you win $10,000,000 in the Powerball, you can expect to actually take home a lump sum that is closer to $6,000,000. While this still isn’t a bad payday, it is still a much smaller dollar amount than the stated winnings.
Rationale in Favor of a Long Term Payout
There are potentially significant tax benefits that favor the decision to choose to receive your lottery payout in a long-term, structured payment schedule. Depending on the actual dollar amount of of the lottery winnings, there are two main reasons to choose an annuity payment. First, by selecting to receive incremental funding, you avoid being placed in a higher federal tax bracket that would force you to pay more money to the government. Second, if you are able to sustain yourself with the determined payment plan, you are guaranteed to receive a larger payout over a longer period of time.
Reasons Against Choosing to Receive an Incremental Payment Plan
The most obvious disadvantage to receiving lottery winnings in the form of a structured settlement is that unforeseen fiscal requirements my emerge and incremental payments may not be enough to cover the new expense. The most frequent situations that Lump Sum Funder has assisted individuals with liquidizing their structured winnings include:
- Put a down payment on a new home- Oftentimes individuals with a large amount future of payments decide to cash in on their winnings by selling a portion of their payments for enough money to put down on a new home for their family. When they won they had no intentions of moving, only to determine to relocate several years later.
- Start a new business- Lump Sum Funder has assisted a multitude of individuals sell their future lottery payments once they decide to open up their own business. It take a large amount of liquid capital to cover all expenses associated with a small business, and we can help you worry less about covering the bills!
- Pay for school tuition- College and secondary school are very expensive, and many individuals would rather pay up front instead of taking on a multitude of student loans that can come back and hurt your pocket later in life.
- Address a medical emergency- As we all know, medical bills can come quickly and without warning. The last thing that anyone wants to worry about when they are dealing with a medical situation is how they are going to cover the costs. Lump sum funder strives to assist all individuals conveniently and quickly receive their entitled lump sum in order for them to get back to caring for themselves and their family members.
Our Annuitized Lottery Buying Process
The process of selling your lottery payments in exchange for a lump sum of cash begins with a disclosure statement and ends with you receiving your money in the form of a direct wire to your account or a check made payable to you. In order to legally transfer your lottery payments, we must obtain court approval by a Judge in your state. LumpSum Funder is an expert at the court approval process and will walk you through every detail so that selling your lottery payments can be as simple as winning the lottery!
You may be asking why individuals would seek to sell their lottery payments. Well, there are several reasons lottery winners decide to sell. Each of our clients are unique but everyone’s reason for selling is equally important. Lump Sum Funder will be sure to discuss your plans with you so that we can meet your lump sum needs.
If you have any questions or are ready to move forward, Lump Sum Funder would love the opportunity to talk to you about your options so that we can provide the best solution. Customer service and professionalism are some of the most important principals we operate under. We look forward to hearing from you soon!