You’ve Won the Lottery – Now What

Suppose it’s $100MM. More than you can spend responsibly.

I don’t think we have discussed this recently but it is an interesting topic. I think most would agree best you can do is share the money with family or good friends. This gives you someone to enjoy it with. Otherwise, they may come to you for loans or handouts.

I have recently gotten in this situation. Not from lottery but from Nvidia stock.

You may think it’s easy to give money away but think again. The gift tax has an $18K/yr exemption for each individual each year. That number is indexed to inflation and increases every year. If you give more than that you file a gift tax return and any money over $18K gets deducted from your lifetime federal estate tax exemption. One way or another you better spend it or the estate tax gets you for 40%.

Another aspect is Generation Skipping Tax. If you gift to anyone under 37.5 yo, forms are required and again it gets deducted from your federal estate tax exemption.

A Charitable Remainder Trust is one way to make a distribution to your heirs but again Gift Tax and GST rules apply.

If you win the lottery, it’s a good idea to meet with the experts and decide what names to put on your winning ticket. Once the funds are collected your options are limited. You can alway give it to charity or spend it.


That reminds me, I forgot to buy a lottery ticket today!

There’s no [practical] limit for charitable organizations.

Also, you can give $18k a year, and your wife can give $18k a year. Also, you can give $18k to your child, and you can give $18k to their spouse, and your spouse can give $18k to your child, and your spouse can give $18k to their spouse, for a total of $72k a year.

If you still have dependents, you can gift them more in many cases.

Very few people would agree with this as stated. It will almost surely cause you to lose most of them as friends. Take them out to fancy dinners, sure. Maybe even on a fancy vacation with y’all somewhere. But giving cash randomly is a very bad move. It is almost guaranteed to lead to resentment.

Also, paying estate taxes after a good long and enjoyable life isn’t the worst thing in the world. Let’s say it’s $200M by then. You pay roughly $73M in tax. That still leaves a heck of a lot of money for your family to receive from your estate!


That only works for those who are married. Nearly half of all US adults are not currently married. S1201: Marital Status - Census Bureau Table


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Don’t forget, under current law, the Federal estate tax exemption limit is due to be cut about in half in 2026. However, gifts prior to 2026 will be grandfathered in, even if they are over the limit in place when you die. So if you are concerned about going over the estate tax limit after it’s decreased, you might want to consider gifting your money in the next 2 years, even if you have to file gift tax forms.



To the post just about, that’s not exactly right. You have to be “rich-rich” to take advantage of this. If you give “just” $1M now, and the exemption drops to about $7M as scheduled, when you die that $1M will be deducted from your about $7M estate tax exemption. To take advantage of the remaining 22ish months until the exemption drops from about $14M per person to about $7M per person, you have to gift more than about $7M now for that excess amount to grandfathered. Some are calling this the “donut hole for the middle rich”. Sure, if you have $14M, you can gift it all now estate tax free and nothing will be clawed back if the estate tax exemption goes down to $7M as scheduled. But you’ve gifted away all your money! To be able to do this effectively, you need to be rich-rich where you can gift away $14M ($28M for a couple) and still be able to afford your private jet etc.


I think you missed the part where I said (emphasis added):

In the scenario you provide, the person would not be going over the limit after it’s decreased.


Um… is there some advantage to having your spouse give you your own money?

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To aj485 (sorry, I still don’t know how to bring up the prior comment that I’m replying to):

You lost me. If you are concerned about going over the estate tax exemption limit after it’s decreased, gifting less than about $7M per person right now won’t help you. Gifting a million or two does nothing to rectify/hedge this problem.

Ok. Assume you get $100M, and you have
80M that you’d like to use today to help family and friends get going TODAY, toward their own dreams.

Is it possible to set up $1M or $3M accounts, and put you and one other person on the account?
Say you got a niece
You open an account and fund it with the desired amount. And put that niece on the account as a co-owner.

Yes, she could abscond with the cash.
Let’s get that horror story out of the way.
Let it go.

Now, is there a way to do this that doesn’t run afoul of IRS rules and inheritance regulations?

Would it be possible to set up the account and let her manage it for a fee?


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Highlight the part of the comment that you want to use, and click on the “quote” link that comes up above the highlight. Also, you can call out a specific poster by typing in the @ symbol and start typing their username. A list of users will come up and you can click on their username. I typed in “@D” and your username came up first on the list. I clicked on it and got this: @Daryll44

You have to have enough to give away more than the $7MM. Say you have $20MM, and only need $6MM to feel comfortable that you won’t run out of money for the rest of your life. You could give away $14MM before Jan 1, 2026 and the extra $7MM would not be subject to any Federal estate taxes, even though it would have been if you had not given it away and it ended up in your estate when you died in or after 2026.

I don’t disagree that you have to be richy-rich to do this, but the title of this thread starts “You’ve won the lottery” and the current cash (not annuity) value of the PowerBall drawing tonight Home | Powerball is almost $138MM. Even after taxes, you’d still end up with north of $50MM.



You could pay gift taxes on everything over your Federal estate tax exemption amount.

You’re paying her a fee to spend your money on herself? That sounds a lot like you gave the money to her, which means you’d need to declare it as a gift, and pay any gift tax that was due.



If I won the PowerBall the taxes would be the last thing on my mind.


Sorry I wasn’t clear. There are two couples here, let’s say parents A (wife) & B (husband), and their child C who is married to person D (their spouse).

A can give her kid C $18k.
B can give his kid C $18k.
A can give her kid in law D (C’s spouse) $18k.
B can give his kid in law D (C’s spouse) $18k


They should be the first thing, because you will owe them, and you need to understand how much money you have left AFTER you pay what you owe.



@aj485 Thanks for the tutorial.

We agree on the gift tax thing. I might add that anyone with “only” $20M might not be comfortable gifting $14M, unless they were on their death bed, but likely to hang on a bit longer, on Dec 31, 2025.


There are probably ways to gift the $14M but still retain the right to its income until you die. Some sort of trust, but I’m not an expert.

A Charitable Remainder Trust could be one way to do so. I’m sure someone with $20MM can probably hire someone to advise them of other ways to do so.



No matter what you do, someone is likely to be unhappy about it. The good thing about a will is you are deceased and don’t have to defend your choices. Living gifts are more sensitive. Best you can do is treat the heirs however defined equally. Every parent has this problem. Your children may have different needs but treating them differently can cause problems. And of course choosing one and not the other (to inherit the company) can make troubles. Even a major donation to charity can cause problems.

All these things need to be discussed with family. Making everyone happy can be difficult. I say it is better than doing nothing.

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I agree. It is better than giving it all to charity. Estate tax is only 40% or so. Your heirs get to keep 60%. (Of course your state may have stiff inheritance taxes too.)

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Well, as a general rule, of course. But, in this case, there are easy things you can do to avoid unhappiness. The first and primary thing is to not talk about it with your friends (or even non-immediate family). The minute they find out your stock is worth ~$100M, all relationships will change. Guaranteed. What you can do, is talk in very vague generalities, without numbers or orders of magnitude. That usually works well enough.

Making everyone happy is impossible. That’s because the psychology of individuals varies so dramatically, that two people can have the same background and the same set of facts, yet believe that diametrically opposite things should be done (with your money in this case).