Selling Lottery Payments
When you win the lottery, you generally have a choice between a long-term payment plan and a one-time payout for your winnings. If you chose a long-term payment plan in the form of an annuity and it isn’t working for your anymore, we may be able to help you sell your lottery payments for an immediate lump sum of cash.
What Are My Lottery Payout Options?
- Lump Sum — Take the entire amount of your lottery winnings in one lump sum payment. Winnings are taxed in accordance with federal income tax laws for the year the lottery was won and the money was received.
- Annuity — Long-term payout agreement. Annuities provide recipients with consistent, scheduled payments over a period of time while generating interest on the funds in the annuity.
If you decided to elect an annuity as your payout path and are considering selling your lottery payments for a lump sum of cash, we’re here to help.
What Are The Differences Between Lump Sums and Annuities?
With a lump sum, you receive the total amount in one payment. With an annuity, you are paid out over a period of time.
- Annuities may have stipulations that limit winners from changing the payout conditions in the case of an unexpected family emergency or financial crisis.
- The scheduled payments may prevent a winner from making large investments. Such investments can potentially generate more cash compared to the amount of interest earned on the annuities.
Do Annuity Lottery Payouts Have Better Tax Benefits?
Lump sum recipients’ winnings are treated the same as any other income, and are therefore subject to income taxes on the total amount at the rate of that particular tax year. This means some lump sum recipients may find themselves in a higher tax bracket. With annuities you are generally taxed on the amount received in any given year. You should speak with a financial advisor or tax professional when decided which option is best for you.
Can I Sell My Lottery Payments?
Contact your lottery company to determine if your annuity can be sold. If it can be, keep in mind the following considerations:
- Currently, not all states allow aftermarket sales of lottery annuities for a lump-sum payment, so double check with the state you live in and the state the ticket was sold in.
- You negotiate and determine the terms of sale — sell all or part of your future payments.
- Court approval is required for the transaction to take place. A judge makes the final determination for whether or not such future payments can be sold.
How Do I Sell My Lottery Payments?
Selling your lottery payments is possible if you meet the criteria and take the right steps. In order to sell your lottery annuity payments, you will need to do the following:
- Reach Out to a J.G. Wentworth Representative
- Get a Quote for Your Lottery Annuity Payment Sale
- Accept the Lump Sum Offer for Your Payments
- Receive Court Approval for the Transaction
- Receive Your Cash in a Lump Sum
Will I Owe Taxes if I Sell My Lottery Payments?
When you cash in on some or all future lottery payments, it is considered a taxable event. Taxes are withheld from the amount distributed to you according to applicable tax laws.
What Happens to My Lottery Annuity If I Pass Away?
Lottery annuities may allow payments to be passed to the winner’s heirs when the annuity owner dies. In that event, your inheritor(s), whether beneficiary individuals or in the form of an estate, will receive any remaining payments.
Learn more about lottery winnings and be on your way to getting your cash sooner!