Estate Planning a Top Concern for Recent Illinois Lotto Winners

 Posted on April 24, 2012 in Estate Execution

One of the three winning tickets sold in the recent Mega Millions was sold in Illinois, igniting the hopes of future lotto winners statewide. Now the winners face the overwhelming job of deciding what to do with all of the money won. And one of the issues facing them is how to include the money in their estate planning.

Many financial experts advise that since tax rates are expected to raise in the next few years, it's advisable to take out a lump sum instead of recurring payments. So if you're looking for a smaller tax bill over time, the lump sum can protect you or protect your heirs if they inherit after the tax rates rise.

If a winner decides to receive the winnings in annual payments, the remaining payments after her death will go to her heirs. In many cases, however, the winner does not keep detailed records of the payments she received prior to her death, and coupled with federal income and inheritance taxes, the amount the heirs owe on taxes may be more than the amount received from the lotto payments.

There are several ways to protect a lotto win through careful estate planning, including life insurance trusts, standard revocable living trust, and reciprocal life insurance trusts. A well executed estate plan will include all if not some of these. This will lessen the tax burden the heirs will face after a winner's death, and make sure that the money goes exactly where the winner wanted them to go.

While a lotto win or any sudden financial windfall can make a winner feel invincible, it's important to plan for where the money should go in the event of a person's death. And the way to do so is with a well executed estate plan that's in place well before the need arises. Contact a top Wheaton, Illinois estate planning attorney to prepare a proper estate plan long before you anticipate needing it. The experienced wills and trusts lawyers at Stock, Carlson & Asso. LLC, can help with all aspects of Illinois estate planning.