History has shown us that jackpot winners often lead lives marked by excess and regret, from spending their winnings frivolously to tragic episodes such as Willie Hurt’s crack-cocaine addiction which cost him his winnings.
There are also plenty of generous people who use their wealth to give back. Take the Kuteys of New Jersey, for instance; they used their jackpot money to help create a spray park which offers children a place to cool off during the heat of summer.
Historical Background
A jackpot is defined as the maximum sum that can be won from slot machines or lotteries, or can refer to an accumulated prize pool in games like poker where unwon payouts build into an accumulation that eventually leads to an in-game prize pool that leads to its creation.
Michael Carroll is one of the more notorious cases where winnings were wasted away through spending on drugs, prostitutes and flashy cars; even years after collecting their prizes they succumbed to drug addiction or other issues and died within years after collecting their prizes.
John and Linda Kutey provide a great example of how lottery winners can use their funds to give back to their community. Based in Green Island, New York, the couple used their winnings to upgrade a local park by installing an innovative spray park without costing taxpayers any extra. Plus they purchased houses, cars and household goods.
Common Misfortunes
Tragic stories abound of jackpot winners who blew their wealth through reckless spending, poor decisions and addiction. Unfortunately, most of these people did not seek advice from financial advisors prior to winning big and wound up bankrupt or broke quickly afterwards.
Michael Carroll was an Englishman who, at 19, won a lottery jackpot of PS10 million. Although he promised not to waste it lavishly, he quickly spent it all – buying lakeside mansion, Mercedes and BMW automobiles, steel balls used to catapult into store windows for charity drives, cocaine and hookers in abundance – before running out of funds and returning to working at a biscuit factory five years later.
Joseph Roncaioli, a doctor who won a $5 million jackpot with his wife Ibi, found himself overwhelmed by wealth and its accompanying stresses. Unable to cope, he killed Ibi by injecting her with poisoned needles while pretending he was checking for blood due to her poor health status.
Regulating Lotteries
As part of their efforts to protect the public, most states have laws in place that govern how lottery winnings should be spent. Some state governments only permit winners to opt for annuity payments while others mandate all jackpot winners receive their winnings as lump sum.
As lottery winners, it is essential that they understand their rights and how to protect themselves from unfair treatment or abuse. Some states are more accommodating when it comes to protecting lottery winners.
Some state laws allow winners to remain anonymous, which can be an invaluable advantage when using winnings for good. New Jersey permits lottery winners to remain anonymous so long as they don’t disclose the amount of their prize; other states do not afford this protection and make winners’ names and hometowns public record; this doesn’t have to be bad; in some instances it can even add some privacy protection!
Taxes on Lottery Winnings
Winners may also face state taxes; New York levies an extortionate tax rate while Yonkers has lower levies.
No matter whether lottery winnings are taken in one lump sum or over time, they remain subject to mandatory tax withholding at 24% – leaving an enormous gap between what winners actually receive and the actual amount due depending on their tax bracket.
People making annual or monthly payments can avoid the mistakes made by too many lottery winners by consulting a wealth management advisor in creating an investment plan. By working together on creating such a plan, lottery winners can ensure their winnings will last and put it toward making an impactful difference for themselves and others – for instance, The Kutey family used their jackpot win to build a spray park offering children of all ages an enjoyable place to cool off without breaking the bank!
