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Old 09-25-2007, 09:31 AM   #21
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PS - I think someone said that lotteries are a form of a stupid tax - the dumber you are the more you are taxed.

Having said that - I do by one about once a month or less - I like to dream.
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Old 09-25-2007, 09:47 AM   #22
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Originally Posted by justin View Post
If I won a $100 million jackpot, then I'd expect to get closer to $30 million take home money after taxes and present value. And let's just say $30 million just ain't what it used to be! After all, that is only $1.2 million at a 4% SWR, and taxes on that kind of income wouldn't be insubstantial.
You wouldn't get taxed twice on that money. The $30M has already been taxed, so the 4% each year is just your own allocation of funds, not taxable income. Of course you'd be investing that $30M and anything you make on it is taxed, but that means the $30M base is growing too.

Don't gifts over 10K count against your estate taxes? I suppose there's ways of creating family trusts to give them houses, cars, etc, or putting those things in your name, is that how people do it?

Mostly it seems like a headache because as I understand it, it's tough to stay anonymous so you'll have every quasi charity, uncle's friend, friend's uncle, and just about everyone else with their hand out. I'd certainly do something for my family, especially education and health expenses, help with debts, etc. But I'd worry about whether any of them would go crazy with the money and whether I'd have to put strings on it, which wouldn't be fun for anyone. And if you won too much, you'd probably start having to worry about personal security.

And that's why I've never bought a lottery ticket. The odds are poor, and I really don't want a mega prize.

I suppose I wouldn't mind clearing about $10M, that seems like a good amount to live very comfortably, pass out annual $10K checks to family, but not so much to draw constant attention like that guy in WV.
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Old 09-25-2007, 10:26 AM   #23
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You wouldn't get taxed twice on that money. The $30M has already been taxed, so the 4% each year is just your own allocation of funds, not taxable income. Of course you'd be investing that $30M and anything you make on it is taxed, but that means the $30M base is growing too.

Don't gifts over 10K count against your estate taxes? I suppose there's ways of creating family trusts to give them houses, cars, etc, or putting those things in your name, is that how people do it?
I understand the double taxation issue. However, the $30 million invested might generate half a million or a million in taxable income (depending on choice of investments, of course). Even if I'm selling investments where Capital gains = zero (ie - sale price = cost basis), I'm still on the hook for taxes on the income generated by the portfolio.

In practice, two people (either married or unmarried) can give $12000 each to any number of recipients per year. In other words, me and DW can give $24000 to any number of individuals tax free. Then there's another $2000000 in gift tax exclusion for a married couple to use up during life or upon transfer at death. The $24000 limit per recipient means a married couple can receive $48,000 per year from us. A family of 4 can receive $96,000 from us. Not limitless, but a pretty lax "limit". You'd certainly have to structure gifts appropriately so as to limit tax liability.

There is also a work around that I think is acceptable in practice (maybe not technically "legal" ), where you allow those to whom you want to gift significant amounts to claim a fractional interest in the lottery ticket claim. In other words, if you won $100 million, and you wanted to give mom n pop $1000000, you would allow them to claim a 1% interest in the winning ticket. I suppose a prosecuting attorney would claim the transfer of a 1% interest in the winning ticket to be a gift worth $1000000.

Of course you'd want to hire a tax attorney, estate planning attorney, and/or tax accountant/CPA at a minimum to figure out the appropriate strategy for claiming the ticket and structuring your affairs.
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Old 09-25-2007, 11:00 AM   #24
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OK, that makes sense, when people do lottery pools they split winnings. I remember seeing the whole group from the Nebraska meatpacking plan collecting the prize a couple years ago. So it's seems likely you could do this with family without much of a problem. It just means you probably need to figure it out before collecting.

I forgot that the 10K limit was raised to 12K.
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Old 09-25-2007, 11:08 AM   #25
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DH and I have no kids, so it's all extended family on his side. I'm an only child and not generally close to most of my extended family. So while we may seem a bit "stingy", it's just a reflection of the facts.

The very first thing I'd do (after setting aside 33% for taxes) is arrange for our friend P to have surgery to get his back corrected.

Then we'd set aside money for college funds for the nieces and nephews (thirteen of them, all told). We'd help anyone out with a financial emergency, of course, but I'm not sure we'd give significant cash gifts to anyone otherwise.

Although we would consider buying all the "close" family a vacation somewhere nice -- maybe all of us going on a round-the-world cruise?

That's the short-term plans, anyway. Long-term, we'd set something up for any family members who needed long-term care due to disability, and then probably leave the rest to charity.

Nothing too grand, in other words.
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Old 09-25-2007, 11:16 AM   #26
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I'd do the following:

Set up a fellowship at my deceased sister's university to help promote Food Science as a career path

Set up an angel investor firm and fund it with $5 million, and have local entrepenurs vie for the funds.

Give $1 million each to the local zoo, museum, and art museum, anonymously.

Travel the world.

Give a bunch to our church.

Try to live as "under the radar" as possible.......
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Old 09-25-2007, 11:17 AM   #27
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Boy... some of you I wonder about... you would not accept $100 million... or you would want to keep it quiet from your relatives Gee, glad I am not in your family....

We are not talking about $1 mill or $5 mill, but $100 mill...

I don't mean this response to be directed at Texas Proud, but the generic board "you". His post is just a good example of why I wouldn't want anybody to know. . .

If you were in my family, would you be upset if I gave the $100 mill away? Would you feel you *deserve* a piece of it?

How much of it would you think you deserve? What if I gave you only 100K? or maybe that wouldn't be enough... we are talking about $100 mill now right... so you deserve at least $1 mill of it, but why stop there... maybe you deserve $5 mill because we are talking about $100 mill right? Honestly think about your feelings on this.

Would it bother you if somebody in your family won $100 mill and gave it all away? Why? What if they keep it all for themselves, would that bother you? Money has a way of screwing up relationships. What is your dollar amount that you think you should get out of $100 mill if a family member wins? What if you get less than that amount?

Personally I think I should get $0, and I have no problem if they give it away, or keep it all to themselves. I'd actually rather *not know* if they won. Money is not important to my relationship now, why should it be after a big win?

So maybe now you understand why I wouldn't want anybody to know if I won $100 mill. It would just cause problems. I'm happy right now with the money I have, having more will not buy more happiness.

Laters,
-d.

ps.
My understanding of splitting the winnings/tax bill is you need to figure it out before BUYING the ticket. Put it in writing and get it notarized before you buy any tickets. That is the safe way. Anything less is a potential problem.
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Old 09-25-2007, 12:57 PM   #28
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That's because if you actually did win a $100 million lottery, you'd have more than your family knocking at your door. You'd have phone calls, emails, letters, knocks on the door, at about 100 per day asking for money - so I've heard.
Not me... I would hire someone to take them (one of my friends)... and ignore the rest... People would quickly learn that I ignore all requests from people and only give where I want to give.. but you are right, it would be that way at the beginning... again, who cares when you got that kind of money

PS... I would not be at home anyhow... I would be traveling
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Old 09-25-2007, 01:11 PM   #29
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I'd probably think about it longer and harder than I'm thinking about pulling the plug. I might go see someone whose late DH won a multi-state lottery. I know that one of the things he did was to RE! He then built a new house, and a second house because he didn't like the first. He visited everyone he knew, relatives and friends; I got to spend some time with him a few times and after I found out he had won, I didn't quibble about him picking up the check. He once mentioned he wanted to help some relatives but they didn't want his help. I suspect that money extended his life somewhat. He wanted to take a flight on the Concorde but I don't think he did that. He travelled somewhat as his and his DW's health allowed. He regretted moving out of his house and leaving the good neighbors behind; apparently it wasn't as much fun having football players as neighbors.
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Old 09-25-2007, 02:19 PM   #30
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I'd retire immediately, then buy a house where I could ski all winter, then another house where I could be a Bills season ticket holder, then just live life and enjoy spending time with my first (and favorate) wife.
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Old 09-25-2007, 02:47 PM   #31
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As someone mentioned, not buying lotto tickets guarantees you'll never win. However, buying lotto tickets doesn't improve the odds much...
LOL>.... SO TRUE... but with out ticki... no money for sure...
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Old 09-25-2007, 02:54 PM   #32
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Since the odds are about the same if you buy a ticket vs. not buying a ticket...

If I was meant to win the lottery, I'll find the winning ticket laying on the ground. The odds are just about the same as if I bought the ticket, so I figure I'm gonna be a winner any day now!



-d.
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Old 09-25-2007, 03:00 PM   #33
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I don't mean this response to be directed at Texas Proud, but the generic board "you". His post is just a good example of why I wouldn't want anybody to know. . .

If you were in my family, would you be upset if I gave the $100 mill away? Would you feel you *deserve* a piece of it? {deleted to save space}
Not a problem... but, if someone in my family did win (and I mean my immediate family only, brothers sisters etc), then I think they would help everybody out.. if they did not, who cares. I am happy like you say and all it would do is have me RE now instead of in a few years... and except for one sister, everybody else is doing 'just fine'. No big money, but all OK.

As for cousins and extended family.. that is their problem. I don't know any closely so they would not be on my radar. I would only help out someone go to school or if they had a medical problem, nothing else.. and since I never see them, if they got upset so be it... I will not see them in the future either..

To be clear... I would help out my brothers and sisters... if they wanted to pass it to nephews and nieces that is fine with me... but that is their decision..
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Old 09-25-2007, 03:05 PM   #34
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Since the odds are about the same if you buy a ticket vs. not buying a ticket...

If I was meant to win the lottery, I'll find the winning ticket laying on the ground. The odds are just about the same as if I bought the ticket, so I figure I'm gonna be a winner any day now!



-d.
There's the joke about the man who prays to god every night, asking to win the lottery. Night after night, year after year, the same request.

One night, after a rough day, the man hits his knees, and in a half-preading, half-complaining way, asks "God, why won't you answer my prayers and let me win the lottery?!?"

A booming voice from above answers "Try meeting me halfway. Buy a lottery ticket for once."
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Old 09-25-2007, 06:41 PM   #35
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the problem with having $100mm (i'm assuming that's the after-tax cut of the $300mm mega lottery not available in florida) is that then i'd have to have one of these:



which means i'd have to pay captain and two crew and then i'd have to assure at least enough relatives financially independent so they wouldn't have to work so they could accompany me. between that and the house with enough dockage, before you know it, i'm responsible for the livelihood of a staff of at least five and for the lifestyle of pretty much everyone around me.

i'd rather be born into that money with parents who never die or marry into it. as lovely as it might be to win $100mm, i don't care to be that responsible for all that money conveys. it's simply too much work.
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Old 09-25-2007, 07:38 PM   #36
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I would offer the state 30 million of it to keep my name a secret. Then I would give each close family member a couple of million, tell them I kept 2 million for myself and that I gave the rest to charity.
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Old 09-26-2007, 01:56 AM   #37
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Boy... some of you I wonder about... you would not accept $100 million... or you would want to keep it quiet from your relatives Gee, glad I am not in your family....
And I wish I was in yours.

But I'm not.
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Old 09-26-2007, 11:37 AM   #38
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I have no idea what I would do with 100M. That's a boatload of money.
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Old 09-26-2007, 03:17 PM   #39
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This diamond Encrusted Skull has an asking price of $100M.

What do you think ? Would you rather have this beauty or support some lowlife relatives ?

Here are some other options for your newfound wealth

ugallery: What Would You Buy with $100 Million?
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File Type: jpg Skull.jpg (29.9 KB, 51 views)
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Old 09-30-2007, 04:26 PM   #40
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This diamond Encrusted Skull has an asking price of $100M.

What do you think ? Would you rather have this beauty or support some lowlife relatives ?

Here are some other options for your newfound wealth

ugallery: What Would You Buy with $100 Million?
Only if it comes with a diamond-encrusted pancake on its' head...
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