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What to do if you win money on Mega Millions?

Winning the lottery is a dream for many people, but knowing what to do after you win is critical. With the Mega Millions jackpot reaching over $1 billion, the stakes are incredibly high. If you are lucky enough to have the winning ticket, you’ll need to think carefully about next steps. Having a plan in place can help you use your windfall wisely.

In this article, we’ll explore key considerations around claiming your prize, handling publicity, selecting financial advisors, investing wisely, budgeting, protecting your money, giving back, and more. With the right guidance and discipline, your lottery winnings can provide long-term financial security for you and your loved ones.

Claiming Your Prize

The first step is to sign your winning Mega Millions ticket and make copies of both sides for security. Keep the original in a safe place. Most lotteries recommend you put the signed ticket in a safety deposit box or other secure location until ready to claim.

Next, you’ll want to decide whether to claim as an individual or as part of a trust. There are pros and cons to each approach around publicity, taxes, control of the money, and more. Sit down with legal, tax, and financial advisors to determine the best option given your specific situation.

Regardless of whether you claim individually or through a trust, you’ll want to claim your prize in the state where you purchased the winning ticket. Mega Millions is coordinated by state lotteries, so you must go through the lottery commission in that jurisdiction. Many states allow you to claim anonymously through a trust if you wish.

Once claimed, the prize money may take several weeks to process, with winnings over $250,000 requiring some extra validation steps. Work closely with your advisors to decide the optimal way to receive funds when distribution occurs. Lump sum or annuity? What accounts to deposit into? Any transfers to trusts? Make a comprehensive plan.

Handling Publicity

For large jackpot winners, publicity is inevitable. Lottery officials will want to do a press conference and announcement. This is understandable given public interest and the need for transparency around winner validity.

However, winners should think carefully about how visible they want to be publicly after the initial wave of press. Remaining low key can help maintain privacy and safety. Some steps to consider:

– Keep press interactions brief, share minimal personal details
– Politely decline additional media requests after required appearances
– If possible, claim prize anonymously through a trust
– Hire spokesperson to field press inquiries
– Avoid sharing information on social media
– Consider changing phone numbers, email addresses, etc.
– Beef up security precautions if public interest seems high

The excitement around winning can make it tempting to embrace fame. But a more guarded approach usually makes sense long term. Keeping a low profile helps maintain normalcy.

Selecting Financial Advisors

Vetting professional advisors to help manage your windfall is critical. Look for individuals with proven expertise guiding large lottery winners and other ultra-high net worth clients. Requirements should include:

– Fiduciary duty to clients
– No commissions or fees based on product sales
– Experience with lump sum prize claims, trusts, taxes, investments
– Ability to help with privacy, security, publicity navigation
– Network of other experts (legal, accounting, insurance, etc.)
– Personality match – you should feel comfortable with them

Ideally your advisor team should include a fee-only financial planner, tax specialist, accountant, lawyer, and insurance consultant. Make sure you understand fee structures and conflicts of interest before hiring. Don’t be afraid to ask lots of questions and run thorough background checks. This is your financial future at stake.

Investing Wisely

You’ve just won hundreds of millions of dollars – so what should you do with the money? How you invest your winnings will impact not just you, but generations to come.

While it can be tempting to make extravagant purchases right away, going slow and making conservative investments is usually the smartest path:

– Pay off any debts you may have (credit cards, etc.)
– Set aside funds to cover taxes (often around 50% of jackpot)
– Make sure you have excellent insurance policies in place
– Invest the rest in a diversified, low-cost portfolio focused on long-term growth
– Aim for a balanced asset allocation across stocks, bonds, real estate, etc.
– Work with a fiduciary advisor who can help guide your specific investing approach based on your situation and risk tolerance
– Create a sustainable withdrawal rate policy to preserve capital for the future (3-4% of assets is a common guideline annually)

Avoid investment pitfalls like speculative stocks, high fee funds, and get-rich-quick schemes. Take time to educate yourself on prudent investing principles. Wealth preservation and generational legacy should be the priority.


A sudden influx of hundreds of millions of dollars can tempt uncontrolled spending. That’s why a written budget is essential. Work with your financial advisor to tailor a budget that allows you to live comfortably, while maximizing the funds available for investment and the long run.

Elements to factor into your budget:

– Income taxes (federal and state)
– Insurance costs (life, disability, property, etc.)
– Housing expenses (if buying a new home)
– Loan/debt repayments
– Everyday living costs
– Reasonable entertainment/travel
– Savings and investments
– Philanthropy and gifts (if desired)

Be very conservative in what you estimate for living expenses each year. Costs add up quickly. Preserving principal should be the priority in case you live longer than expected. Discuss contingency plans with your advisors as well.

Protecting Your Money

Coming into sudden wealth can make you vulnerable to frauds, scams, lawsuits, and even family/friends looking for handouts. That’s why protecting your money is crucial. Key precautions to take:

– Live below your means – don’t flaunt your wealth
– Use trusts and LLCs to keep assets private
– Make sure you have umbrella insurance coverage
– Don’t over-share on social media (or avoid it entirely)
– Invest in home security precautions as needed
– Don’t give away money freely to others
– Watch out for new “friends” or even romantic partners looking to take advantage

Think through how you can prudently protect yourself and your family – especially children and grandchildren. Their long-term financial well-being should be the priority.

Giving Back

For many lottery winners, philanthropy becomes an important part of their wealth plan. With hundreds of millions in newfound wealth, it just makes sense to give back. But how you donate also requires planning:

– Decide whether to establish your own foundation or fund donor advised fund at community foundation
– Determine focus areas based on your passions – arts, environment, education, health, etc.
– Research effective high-impact charities within chosen domains
– Consider both national and local groups where you live or have roots
– Make site visits and thoroughly vet organizations before giving
– Consider both immediate and legacy gifts (via your estate)
– Include heirs in discussions so they learn values around stewardship

Philanthropy allows lottery winners to do great good. But you want to ensure your gifts are spent effectively and continue impacting causes you care about long into the future.

Tax Considerations

Winning over half a billion dollars comes with significant tax obligations. Careful planning in the early days after your win can optimize the after-tax wealth you have to work with long term.

For US Mega Millions jackpots, there are both federal and state taxes to consider:

Federal Taxes

Federal taxes on lottery winnings can be up to 37% for the top tax bracket. Key factors:

– Only winnings over $600 are reported to the IRS via W-2G form
– Tax rate depends on your ordinary income level in year you win
– You may pay lower rate if you haven’t had other income that year
– Top 37% rate applies to ordinary income above $539,900 as of 2020
– Federal tax withholding is 24% for winnings over $5,000

Work closely with tax advisors to determine your federal obligations given your specific situation. Ensure estimated taxes are paid quarterly once you claim prize.

State Taxes

In addition to federal, most states tax lottery winnings:

– Rates vary significantly by location from 2.5% to over 8% of winnings
– Some locations like Florida, Texas, Washington don’t tax lottery prizes
– Withholding rules differ – some states take at time you claim
– Check rules carefully in the state where you purchase ticket

The table below shows state tax rates that may apply on Mega Millions winnings:

State Tax Rate on Lottery Winnings
California 8%-12.3%
Massachusetts 5%
New York 8.82%
Ohio 4%-5%
Pennsylvania 3.07%

To minimize state tax liability, some winners establish residency in states with no income tax prior to claiming prize. Requirements vary by state and this move may also impact federal taxes, so consult carefully with advisors beforehand.

Estate Taxes

For massive lottery fortunes, estate tax planning is also essential. Currently federal estate tax of 40% applies to assets above $12.06 million per individual after death. Some key considerations:

– Married couples can use exemptions together to shield $24.12 million
– Indexing for inflation gradually increases exemption amount
– Life insurance payouts may further bolster estate value
– Tax only applies to estate value above exemption level
– Proper trusts and entity structuring are important for inheritance planning

Estate taxes have been in flux over the past two decades, so stay on top of current law. An experienced estate planning lawyer can help ensure you minimize taxes your heirs would owe in the future.

Gift Taxes

To prevent avoidance of estate taxes, the IRS limits lifetime gifts over a certain threshold. For lottery winners, this may apply if you wish to gift money to family or friends. Rules to be aware of:

– Federal gift tax is 40% on gifts above $15,000 per person per year
– Large one-time gifts may also trigger tax if above exemptions
– $11.7 million lifetime combined exemption on gifts exists per person in 2020
– Gift amounts over annual exclusion count against lifetime limit
– Spouses can combine exemptions for $23.4 million lifetime
– IRS reporting required for gifts over annual threshold

If you plan large gifts to loved ones, factor gift tax rules into the equation. An estate planning lawyer can help develop a gifting strategy that minimizes your tax liability.

Lifestyle Changes

Winning hundreds of millions can dramatically alter various aspects of your lifestyle. It’s important to think through how your life may change when it comes to:


You likely won’t need to work for a paycheck anymore after winning the lottery. But that doesn’t necessarily mean you should quit your job entirely. Consider:

– Could you scale back hours or responsibilities but still work occasionally? This may help stave off boredom.
– If you own a business, should you sell or keep running? Get advice from financial and legal advisors.
– Would you enjoy switching to nonprofit work or some other passion project?
– Will you miss the social interaction and sense of purpose that work can provide? Explore options.

Carefully weigh pros and cons of full retirement versus keeping some type of work in your schedule. A sense of purpose matters for well-being.


You may choose to buy a new larger home or even multiple properties after winning big. But don’t rush into real estate purchases. Take time to think through considerations like:

– Do you want to stay local or relocate elsewhere? Check taxes and cost of living if moving.
– Consider security precautions if buying a large showy home. Maintain privacy.
– Hire financial and legal advisors to help evaluate any real estate investments.
– Don’t overspend just because you can. Remain price conscious and think long term.

Buying real estate you can comfortably afford that also meets your needs is usually the smartest play. Don’t buy into hype around speculative investments – focus on quality of life.

Personal relationships

Winning hundreds of millions can strain personal relationships with romantic partners, family members, and friends. Challenges may include:

– Disagreements over money requests from others
– Tension with a spouse or partner around plans for the future
– Stress from friends constantly looking for handouts or loans
– Family members attempting to control or influence your decisions
– People coming out of the woodwork from your past looking to reconnect

Have frank conversations with loved ones early and set boundaries. Consider family counseling. Only provide financial help sparingly after careful thought. Monitor for new questionable relationships.

Safety and privacy

A massive public lottery win puts a target on your back for scams, theft, and harassment. Be proactive with safety:

– Install home security system and cameras
– Be cautious about sharing personal details that could identify your location
– Use a trust or LLC to keep assets private
– Don’t show off pricey purchases publicly
– Vary your daily routine and routes
– Have mail sent to a P.O. box or office address
– Monitor your credit and financial accounts closely for fraud

Make safety and privacy priorities for both you and your family. Take sensible precautions commensurate with your winnings amount.

Maintaining Perspective

Remaining centered emotionally is essential after winning hundreds of millions in the lottery. Some tips:

– Take time to process the magnitude of the win and adjust to your new reality
– Don’t make any big decisions immediately – go slow
– Understand your core values and what really matters most in life
– Reflect on how you can find meaning and purpose going forward
– Surround yourself with grounded people who provide honest perspective
– Be thoughtful and diplomatic in dealing with others about your windfall
– Don’t let money change how you view yourself or identify as a person
– Use your wealth to do good for others and improve the world

Money of this magnitude can dramatically impact all aspects of life. Keeping perspective, prudence and patience will serve you well in navigating the changes ahead.

Enjoying the Win

Even with all the cautions above, it’s important to enjoy your Mega Millions fortune and have fun along the way! You just won hundreds of millions of dollars – this is a time for measured celebration.

– Take dream vacations you’ve always imagined (but keep private to avoid attracting attention)
– Consider buying a luxury car you’ve always wanted
– Make meaningful upgrades to your living situation within reason
– Allot a set budget for splurges on yourself or doing nice things for loved ones
– Give yourself time for hobbies and passions you couldn’t previously pursue
– Think through experiences you want to enjoy or check off your bucket list

Savor this incredible stroke of luck, but do so prudently. Your lottery winnings should upgrade your lifestyle, not completely transform everything overnight. Keep your feet on the ground even while expanding possibilities.

With careful steps around claiming, investing, budgeting, taxes, privacy, and more – your windfall can benefit you, your family, and the causes you care about for decades to come. That’s the true pot of gold at the end of the rainbow.

So enjoy the moment, and then put your mind to work building the financial future you want. With hundreds of millions in the bank and the right discipline, anything is possible!


Winning the lottery jackpot is a dream come true. But managing hundreds of millions in winnings requires thoughtfulness and care to avoid risks. By planning meticulously around taxes, investments, budgets, privacy, security, philanthropy and more, you can prudently steward your windfall for maximum impact. Savor this amazing stroke of luck, but stay grounded in what matters most – your values, purpose, and loved ones. With prudence and perspective, your enhanced wealth can open doors to an incredible future for you and generations to come.