Lotto winner scoops $1m prize but a split decision meant $300,000 vanished before seeing the cash
Despite beating the odds to win $1 million, a lucky lottery player lost a significant portion of it right away because of a choice he made.
On Monday, Sheffield, Massachusetts resident Michael Koldys was shocked to learn that he had become an overnight billionaire.
A $20 scratch ticket from the $5,000,000 100X Cashword game was purchased by Koldys.
In his hometown, a local store sold the winning ticket.
In less than a week, he became the second lottery game winner to win $1 million.
However, the Massachusetts lottery winner only received a portion of the winnings instead of receiving his million-dollar cheque.
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Large lottery winners must make the difficult choice of accepting cash or full payment installments when they go to claim their winnings.
Koldy’s chose to pay $650,000 before taxes as a one-time payment for the former.
He forfeited more than $300,000 of his gains in the process.
He has enormous intentions for the money, even if he has suffered a significant loss.
He stated to lottery authorities that he intended to “have some fun” with his winnings, save for retirement, and purchase a new boat.
Silk’s Variety, the business that sold him the ticket, will also get a portion of the proceeds from the sale of the winning ticket.
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It will get a bonus of $10,000.
Koldy’s choice to accept the lump payment, however, has caused controversy among lottery attorneys and financial consultants.
In an interview with The U.S. Sun, lawyer Andrew Stoltmann stated that accepting the lump sum is a grave error.
The attorney who has defended what he refers to as “lottery losers” has stated that almost 90% of winners choose this choice.
Lottery winnings: lump sum or annuity?
When lottery players win large sums of money, they usually have to decide between an annuity and a lump payment.
The amount of money you receive from your reward may vary depending on the two payout options.
Annuities typically pay out over a 30-year period in gradual increments.
Because taxes are withheld all at once, lump sum payments are made all at once but in smaller amounts. In other words, Uncle Sam immediately receives 24 percent of your award. Winnings are also taxed in many states.
While lump amounts have the advantage of just being taxed once, annuities can provide winners time to build up the financial infrastructure needed to receive a life-altering quantity of money.
When choosing, it’s also important to take inflation into account because distributions don’t change in value with the dollar. This implies that when an annuity comes to a conclusion, you will probably receive less valuable money.
It’s best to confirm payment terms with your state lottery as each state and game has distinct prize payout policies. You can evaluate the advantages and disadvantages of each choice with the assistance of a financial expert.
There are differing views among experts over whether to take an annuity or a lump sum.
Stoltmann claims that it is the wrong decision to make because many winners lack the resources and guidance necessary to manage an unexpected financial infusion that could result in significant losses.
Robert Pagliarini, a wealth counselor, cautioned participants against bringing the money home since the risks were greater.
They can’t afford to make bad investments, he clarified.
“Lotto winners would be far better off if they chose the annuity,” he stated in an interview with The Sunshine.
Winners will be under more pressure if they raise the possibility of making a mistake because they only have “one shot” at keeping their award.
“If you take the lump sum, you have to realize that there is no do-over if you start making bad investments or mistakes,” he stated.
You won’t win the lottery again, for example. This is your only chance at it.
Pagliarini pointed out that if they get paid in installments, this pressure can be lessened.
Responsible gambling
Do not forget to gamble sensibly.An individual who gambles responsibly is one who:
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- Establishes time and monetary limits before playing
- Only gambles with money they can afford to lose
- Never chase their losses
- Doesn t gamble if they re upset, angry, or depressed
- National Council on Problem Gambling https://www.ncpgambling.org/
- Gamble Aware www.begambleaware.org
To get assistance with a gambling problem, visit toncpgambling.org/chat or contact the National Gambling Helpline at 1-800-522-4700.
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