If you are like most people, you dream of winning the lottery or a large lawsuit. In the United States, the most popular form of gambling is the lottery. It is played in all 50 states. What most people do not realize is that most lotteries and lawsuits do not pay out all at once. The Mega Millions jackpot pays its winners a lottery lump sum payout of $750,000 followed by annual payments that continue for about 30 years. If you have won a jackpot, there are ways to get your money sooner. Selling lottery payments or an annuity is not like selling other things. You will need a judge to approve the sale. The court needs to see that you have a valid reason for selling your annuity or lottery payments.
- You want to avoid bankruptcy. In February 2015, there were about 3,422 personal bankruptcy filings every day. In the United States, a large number of bankruptcy filings are due to large medical bills. Courts see avoiding bankruptcy as a very valued reason for wanting to get a lottery lump sum payout and accept this as a reason to sell lottery payments. Courts appreciate people who are concerned about getting their credit back on track after a bad period or medical bills. Even if your financial situation is not dire enough to rise to the level of filing for bankruptcy, paying off your debt is a great reason to sell an annuity or lottery payments. For people aged 18 to 24, nearly 20% are in what is considered to be “debt hardship.”
- You want to pay for someone’s education. Getting a college degree can be a great way to improve and increase a person’s earnings potential but is very expensive. The average cost of tuition and fees for private schools during the 2014-2015 academic year was $31,231. Public schools cost about $9,134 for the same time period. This is according to the College Board. People who receive structured settlements may not be eligible for financial aid. Giving someone the gift of a fully paid college education is one of the best ways to use the money from a lottery lump sum payout. Studies show that a person who completes college without any loan debt has a much higher earning potential than someone who has student loan debt.
- Start a new business. Many people around the country dream of starting their own business. It has been estimated that the average cost of starting a new business is about $30,000 and most businesses that do not make it tend to fail because of the lack of access to start up capital. Getting a lottery lump sum payout can be a great way to pay to start up a business the right way. This is also a great investment in your and your family’s future.
- Buy a dream home. Investing in real estate is another great way to use a lottery lump sum payout. Whether you want to fix up and pay off the home you are in now or if you want to buy a new place, this is a great way to invest in your future. If you have to go the mortgage route you will most likely have to put down between 5 and 20% of the home’s entire value. You can avoid all of this and pay less for a home by buying outright.
If you have won a lottery or expect to have structured settlement payments, you may want to sell to get a lottery lump sum payout or cash for your structured settlement sooner. These are some of the reasons that are commonly accepted by courts when people try to sell their lottery winnings or annuities. Some people sell their settlements so that they can use the money to invest in their future. They take that money and invest in a variety of stocks and create a diverse portfolio. Your reasons are as unique as you are. The courts want to know that you have thought through your financial situation and the implications. Talk to a financial expert and you will come to the right decision about your lottery or annuity.