Winning the lottery can be an exciting and life-changing experience. However, it also comes with a lot of questions and decisions to make. One of the first things lottery winners have to decide is whether or not to go public with their winnings. There are pros and cons to remaining anonymous versus revealing your identity after a big lottery win. In most states, lottery winners can choose to keep their identity private. However, there are a few states that require winners to be publicly identified.
What are the reasons people want to remain anonymous after winning the lottery?
There are several compelling reasons why some lottery winners prefer to keep their identity secret:
- Avoid harassment – Remaining anonymous helps prevent long-lost friends, relatives and strangers from hitting you up for money. It minimizes solicitation from charities and scam artists.
- Maintain privacy – Keeping your identity private allows you to maintain your privacy and prevents constant media attention and publicity.
- Security concerns – There are concerns over personal safety and security when it becomes publicly known that you have come into a huge amount of money. Remaining anonymous reduces the risk of being targeted for crimes like robbery, burglary, kidnapping or extortion.
For many big lottery winners, giving up their anonymity is simply not worth the potential downsides. The hassles and security risks often outweigh the benefits of going public with the win.
What are the reasons people choose to reveal their identity?
While privacy is a top priority for many winners, some do opt to publicly come forward to claim their prize. Here are some reasons lottery winners decide to reveal their identity:
- Enjoy the attention – Some winners want to enjoy the excitement and limelight that comes with publicly winning a jackpot.
- Inspire others – For some, going public is motivated by wanting to share their story to inspire others to keep playing and hoping.
- Claim prize publicly – Winners who want to hold a press conference, do media interviews or collect their oversized check at a public prize ceremony have to reveal who they are.
- Difficult to stay anonymous – Depending on where you live and who you have told, it can be difficult to keep your identity private as word spreads about your windfall.
For these winners, the benefits of announcing their lottery win outweigh their desire for privacy. They are willing to deal with the attention and complications in exchange for enjoying their time in the public eye.
Rules Around Remaining Anonymous by State
Whether a lottery winner can remain anonymous varies significantly by state. Here is a breakdown of the general rules and policies around lottery winner privacy:
States where winners can remain anonymous
The majority of states allow at least some big lottery winners to keep their identities private:
- Delaware, Kansas, Maryland, North Dakota, Ohio, South Carolina and Texas allow winners to remain anonymous for all lottery prizes.
- Colorado, Connecticut, Massachusetts, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Vermont and Virginia allow winners to stay anonymous if their winnings are above a certain threshold (often $10,000 or more).
- Some states, like California and Michigan, offer winners the option to create a trust to claim their prize anonymously.
- A few states give winners a grace period, usually a few months to a year, before their identity has to be revealed publicly.
In these states, lottery winners can avoid publicity and keep their privacy if they wish. Procedures vary but often require claiming the prize through a trust or limited liability company rather than in your personal name.
States where anonymity is not an option
While most states allow at least some level of anonymity, a handful require all lottery winners to be identified:
- In Delaware, Florida, New Hampshire, North Dakota, Ohio, South Carolina and Texas lottery winners cannot remain anonymous.
- In Colorado and Tennessee, only winners of jackpots exceeding $10,000 must have their identities revealed.
- Illinois lottery winners have up to a year before their identity is made public record.
- In Kansas and Maryland, that threshold is $50,000 before a winner’s identity is revealed.
In these states, winners legally cannot refuse to publicly identify themselves, no matter how large or small the amount is.
Special cases
A few states have additional considerations around remaining anonymous:
- In Arizona, lottery winners’ names are kept confidential, but winners with prizes of $100,000 or more must participate in publicity events.
- In Georgia, winners’ identities are not disclosed until after 90 days from the claim date.
- Hawaii allows winners to form a trust to claim prize money anonymously, but their names must be released under open record laws.
- In North Carolina, winners’ names and cities are released but winners can request their identities be kept confidential.
The rules in these states attempt to balance winner privacy with public disclosure. However, anonymity is still limited compared to states where remaining anonymous is guaranteed.
Claiming Anonymity Varies by State too
The specific steps required to claim a lottery prize anonymously also depend on each state’s laws and lottery rules. Here is an overview of what is generally required:
Setting up a blind trust
In states where it is possible to keep your identity private, the recommended way to claim a lottery prize is through a blind trust or legal entity like a limited liability company (LLC). With a blind trust:
- The trust is set up to claim the lottery winnings.
- You do not control or benefit directly from the trust and have no knowledge of how the funds are used.
- The trustee who manages the trust assets is the only name revealed.
Blind trusts fully shield your identity while still allowing you to collect your lottery winnings.
Collecting winnings as an LLC
In some states, winners can form a limited liability company (LLC) to claim lottery prizes while retaining anonymity. With an LLC:
- The LLC is set up specifically to collect the winnings.
- The LLC name is on the lottery ticket and claim form rather than your personal name.
- Your name is kept private as a member of the LLC.
LLCs help maintain privacy since the LLC name, not your own name, is associate with the prize money.
Claiming through a trust with ID required
Some states require you to still provide your name and identification when setting up a trust or LLC to claim lottery winnings.
- You have to provide your identifying documents and personal details to the lottery commission to verify your eligibility and that you are trusting the right party to collect on your behalf.
- Your personal information is kept confidential by the lottery and not made public.
- Only the name of the trust/LLC claiming the prize is announced publicly.
So your identity is still shielded from the public, but not from the lottery administrators.
Picking up winnings in person
If your winnings are small enough, some state lotteries allow you to claim your prize in person while remaining anonymous. Requirements may include:
- Prize must be below a certain threshold (e.g., $600 in Massachusetts).
- You must show valid ID and proof of Social Security number to verify your identity.
- Lottery may still be required to release info like your hometown under public records laws.
For modest prizes, collecting anonymously in person may be an option versus setting up a formal trust or LLC.
Other special requirements
Some states have additional rules around remaining anonymous, such as:
- Agreeing to participate in press conferences and publicity photos/videos wearing disguises.
- Providing extensive personal background information to lotteries to verify identity.
- Meeting in person with lottery officials to collect winnings.
State lotteries want to deter fraudulent anonymous claims, so requirements can vary. Overall, the more a lottery winner is seeking total anonymity versus just personal privacy, the more complex the claiming process tends to be.
Tax Implications for Anonymous Lottery Winners
While trusts and LLCs help shield winners’ identities, they do not change the tax obligations associated with lottery winnings:
| Tax Implication | Details |
|---|---|
| Federal taxes | Lottery winnings are considered income so federal income taxes must be paid. For huge prizes, the top 37% tax rate applies to each dollar over $539,900 earned. |
| State taxes | State income taxes must also be paid in states that tax income, ranging from about 3% to 13% depending on location. |
| Withholding | Up to 30% in federal taxes and up to 7% in state taxes is withheld when prizes over $5,000 are claimed. |
| Reporting | Winnings are reported to the IRS and state agencies. Anonymous winners still must pay taxes on earnings. |
All lottery winners are required to pay income taxes on their winnings, whether they come forward publicly or remain anonymous. Taxes cannot be avoided by claiming through third parties or disguising identities.
Possible risks
While not illegal, there are some potential civil issues that can arise with efforts to win and claim a lottery prize anonymously:
- Disputes over pooling agreements and office lottery pools if the real winner is unknown.
- Claims against the winner by creditors, loan sharks, and other financial stakeholders.
- Lawsuits against anonymous winners if there are suspicions about rigging or cheating.
- Family disputes if relatives are denied their share or inheritance.
These types of lawsuits may reveal winners’ identities against their wishes or tie up winnings in lengthy court battles. While the overall odds of these issues are low, it is a risk for those strongly desiring anonymity.
Advice for Winners Wanting Anonymity
Here are some top recommendations for lottery winners who want to try keeping their identity private after winning:
Understand your state laws
Importantly, verify the policies and procedures in your state for claiming anonymously. Ensure it is even permitted before planning.
Hire legal support
Work with experienced lottery and trust attorneys to properly set up entities and arrangements to claim your winnings anonymously and securely. Avoid going it alone.
Claim lump sum
Opting for the cash lump sum, rather than annual installments, allows more anonymity over decades of future payments.
Have a story
Come up with an explanation for suddenly coming into money to maintain secrecy like inheriting funds or a successful investment.
Move
Relocating to a new community can help you start fresh without everyone knowing your new wealth status.
Lay low
Keep a modest profile appropriate to your claimed income source. Avoid lavish purchases and displays of wealth that attract attention.
Watch associates
Carefully consider who you trust with knowledge of your winnings, as more people in the know raises odds of it getting out.
Conclusion
Claiming lottery winnings anonymously involves carefully navigating applicable state laws and lottery policies. While complete anonymity is not an option in all states, winners can take legal steps to maintain privacy like setting up trusts or LLCs to collect on their behalf. This shields identities from the public, but not from lottery regulators or the IRS. Winners should weigh their desire for privacy against the complications of remaining anonymous for significant windfalls. With proper legal advice and entities in place, many lottery winners can successfully keep their identities secret – but it takes strategy, effort and patience.
