It finally happened!!! You got a message from the Lottonia App saying, “Congratulations, your numbers matched with the drawn numbers! You win the lottery!” You checked your ticket one, two, three times… and yes, they match… it’s true! You’re the winner!!!
So, what now? What should you do?
First things first: Believe it! This is happening, so celebrate! Dance, sing, jump around – do whatever you want; you’ve earned it. Of course, if you’re at work or in public, find a more private place to let it all out.
And yes, I know you’re probably itching to collect your prize and start making your dreams come true one by one. But wait. It’s best to take a breather and think about what comes next. Winning the lottery brings a lot of excitement, but it’s also the start of a process that requires some calm and planning.
Take a deep breath, relax… and let’s go through the key steps of what to do when you win the lottery. Remember, not everything needs to be done today or tomorrow; this is a process you should take step by step, carefully considering each decision along the way.
1. Protect Your Winning Ticket
Your ticket is the key to your prize, so treat it like a treasure. Start by making multiple copies—front and back—and keep the original in a safe place.
And I don’t mean in your purse, phone case, wallet, or pocket. Think of a place where it’s really safe, and you don’t have to move it all the time, like a safe at home or a safe deposit box at a trusted bank.
That way, you’re less likely to lose it or have it stolen.
For extra security, take some photos and videos of yourself with the ticket to have additional proof that it’s yours. Sometimes, it may be a good idea to sign the back of the ticket, although you may want to consider whether this will affect your ability to remain anonymous. But we will get to that later.
2. Be Careful Who You Tell About Winning the Lottery
The excitement of winning the lottery is great, I know. And it’s natural to want to share the news with everyone. But resist that urge.
Don’t call the press, don’t post it on social media, and definitely don’t shout it from the street.
Take another deep breath and stay calm. The longer you can keep this information private, the better it’ll be for your peace of mind and safety.
Of course, you can share the news with your partner, closest family, or inner circle – but no one else. Try not to mention it to friends or co-workers, and most importantly, don’t post anything about your big lottery win on social media.
This is about protecting yourself and your family. News of your win could attract scammers, thieves, people with grudges, or anyone else who wants a piece of the action. So, the fewer people who know, the better.
3. Build a Trusted Financial Team
Winning the lottery doesn’t just change your life; it also brings serious challenges. One of the first steps in this new journey is to assemble a team of experts to help you manage and protect your winnings.
You’ll need, at a minimum, an attorney, a financial advisor, and a Certified Financial Planner to ensure that every decision is handled carefully and professionally.
It’s important to hire trustworthy people with experience advising lottery winners. They’ll guide you through the process and ensure all legal and financial aspects are in order before you claim your prize.
I won’t lie – managing your newfound wealth can be stressful, and you’ll make big decisions in the coming weeks. With the help of your financial team, you’ll be able to decide when and how to claim your winnings and explore intelligent ways to invest and protect your money for the long term.
4. Check the Deadline to Claim Your Winnings
While taking your time with this process is important, you can’t let too much time pass. Remember, there’s a deadline to claim your winnings, and if you miss it, you could lose everything. Winning the lottery is a once-in-a-lifetime event; losing your prize over a simple oversight would be a huge disappointment.
Deadlines for claiming lottery winnings vary by state, so check the specific rules where you played. Generally, the time to claim can range from 90 days to a year after the draw date. Be sure to find out the exact date and write it down somewhere where you can see it so you don’t forget.
5. Claim Your Prize Anonymously If You Can
Protecting your privacy is crucial when you win the lottery. Whenever possible, you should claim your prize without revealing your identity. This precaution will help protect you from unwanted solicitations from people you know and strangers.
Large sums of money can change your relationships with friends and family. You know what it’s like – long lost cousins or friends you haven’t seen in ages may come asking for money. You’ll also attract charities and others with unclear motives. Anonymity can help you avoid these tricky situations.
Now, keep in mind that the rules for claiming lottery prizes vary from state to state. Some states, like Delaware, Maryland and Wyoming allow lottery winners to claim their prizes anonymously. In others, like New York, California and Forida lottery information is considered a public record.
So, if you win in one of these states, your first and last name, state, and city will likely be made public.
Some places also allow anonymity based on the prize size or whether you choose a lump sum or annuity. Learn more: Can winners remain anonymous?
6. Keep Taxes in Mind for Your Lottery Winnings
All lottery winnings over $5,000 are subject to federal taxes, with an automatic 24% withholding. The IRS takes this percentage directly from your prize, so you’ll never see that portion.
However, this initial withholding may not cover all of your tax obligations. When it comes time to file your annual tax return, you must include your lottery winnings as part of your income. If your prize is substantial, your total income could increase enough to push you into a higher tax bracket.
The U.S. has seven tax brackets ranging from 10% to 37%, depending on your annual income. But remember that the system is progressive, meaning that not all of your income is taxed at the same rate. Only amounts above certain thresholds move into higher brackets. So, if you end up in a higher bracket, only a portion of your winnings will be taxed at the top rate.
In addition to federal taxes, you may also owe state taxes on your winnings. Of the 51 states, 33 have rules that tax lottery winnings. However, there are eight states where lottery prizes aren’t subject to state taxes: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
An effective way to reduce your tax burden is to make a substantial charitable donation. Contributions to nonprofit organizations allow you to support a cause you care about and deduct these donations on your tax return, reducing your taxable income.
Keep reading: How Lottery Winnings are taxed?
7. Decide How You Want to Receive Your Winnings: Annuity or Lump Sum
If you win the lottery, you can choose how to receive your lottery winnings: as a lump sum or as an annuity. Both options have their pros and cons, so here’s a quick breakdown of each.
Annuity Option: If you choose this option, you’ll receive smaller, regular payments over a period of up to 30 years. These payments typically increase by a set percentage each year, often around 5%.
This option is ideal if you’re looking for a steady stream of income for life. Plus, annuities come with tax benefits because you’ll pay less tax on each installment, and the total amount you receive is usually more significant than a lump sum.
Lump sum option: With this option, you receive the entire prize amount in one lump sum, although the payout is usually significantly less than the advertised jackpot. This is because the cash value is calculated based on interest rates, which typically reduce the total by 45% to 55%.
For example, the current Mega Millions jackpot is $250 Million, and the cash option is $115.5 Million.
Still, a lump sum gives you immediate access to all of the money, which can be helpful if you’re looking to make large investments, buy real estate, or start a business. You’ll have complete control over how you spend or invest the money right from the start.
Keep reading: How Lottery Winners Spend Their Winnings.
So which option should you choose? The best choice depends on your financial goals, current situation, and plans. Both options have pros and cons, so getting advice from your financial team will be crucial to making a decision that meets your needs.
8. Making a Financial Plan for Your Lottery Winnings
One of the most important steps after winning the lottery is to create a solid financial plan for the future.
I know you dream of buying a private island, a luxury yacht, or a mansion in Beverly Hills—we all do. But slow down and start by defining your goals—what do you really want to accomplish with this money?
This phase is all about thinking strategically. Start by identifying your priorities and assessing your current financial situation. Are there debts you want to pay off? Investments you’d like to explore? Understanding your goals will help you make decisions to secure a lasting financial future.
Creating a solid financial foundation should come before any big purchases. For many, the first step is to pay off any existing debt, such as student loans, mortgages, medical bills, or credit card balances. This can save you thousands in future interest and give you a solid base from which to start.
Once debt is paid off, consider setting aside a budget for immediate goals, such as buying a home or a reliable vehicle. If you already have these covered, consider strategically investing some of your winnings to help grow your wealth over time.
To keep your finances on track, work with your financial advisor to create some budgets based on your goals. Decide how much of your winnings to allocate to each area, from debt repayment and savings to investments and family needs.
And, of course, make room for some fun! There’s nothing wrong with setting aside a budget for a few luxuries. It could be a dream car, a once-in-a-lifetime vacation, or something unique you’ve always wanted. The key is to enjoy your winnings responsibly so that you don’t burn through your winnings too quickly. It’s all about balance.
9. Decide Who to Share Your Lottery Winnings With
If you bought the ticket and won, the prize is yours and yours alone – unless you joined a lottery pool or bought the ticket with someone else. In those cases, you’ll have to share the prize. But if it’s just you, the prize is yours, and you get to decide how and with whom to share it.
And yes, it’s a good idea to share some of your winnings with close family members such as siblings, parents, children, your partner, or even close friends. It’s nice to keep wealth in the family. But keep it under control.
I know you want to please and help everyone, but trying to do it all can backfire. Experts say it is “one of the fastest ways to lose your money”.
To avoid this, create a budget for what you’re willing to share with loved ones – an amount that won’t affect your future.
It’s also a good idea to research the best ways to distribute your winnings among your family. Sometimes, an outright cash gift isn’t the best option. Instead, consider alternatives such as establishing trusts or investing for family members.
You can read our post on How to share your lottery winnings with family and friends.
Summing up…
Here are the most important things to remember when you win the lottery. It may feel like a lot right now, and maybe even a little overwhelming – but take a deep breath. This is an incredible gift, and if you follow these tips, you’ll be able to enjoy it to the fullest.
The most important thing is to relax and take it slow. Think through every step and decision. Seek advice from lawyers and financial advisors who can help you achieve your goals effectively. Keep your new wealth private; not everyone needs to know. And above all, enjoy it! Set aside a budget for fun and make the most of your win!
Share your thoughts or experiences in the comments, and don’t forget to download Lottonia App to stay updated with tips, winning numbers, and more!