The 10 dumbest things you can do if you win the $1.5 billion Powerballhttp://finance.yahoo.com/news/10-dumbes ... 0471.html#
4. Not considering the annuity option. "Research shows nearly everyone takes the lump sum, but that may not be the best move. In fact, the annuity may be a much better option."
9. Thinking you've actually won $1.5 billion. "You haven't. Don't get stuck on the headline number. In behavioral finance, this is called anchoring, and it can cause you to think you have a lot more money than you actually do. Remember, the lump sum is about 60% of that number and then taxes will take another 50%."
Henry Vilas wrote:It depends on factors such as the age of the winner. I probably won't be around for another 29 years.
WHAT HAPPENS IF AN ANNUITY PRIZE WINNER DIES?
The estate will handle the lottery prize. A lottery annuity prize is just like any other asset. You can pass any remaining annuity payments on to your heirs or to anyone else. The Powerball game will even cash out an annuity prize for an estate. This may make it easier for the estate to distribute the prize. It also may be necessary to cash out the annuity to pay Federal estate taxes. We will sell some or all of the securities at competitive bid or will even just transfer the securities to the estate. We do not charge a fee of any kind. We often hear people complain that the jackpot should not go back to "the state" when a winner dies. It does not. I think that this misunderstanding may come from the response that the prize "goes to the Estate" and some people hear "goes to the State."