A LUCKY lottery player scooped a multi-million dollar win but immediately lost a huge chunk of their prize.
The winner from Massachusetts won a staggering $1 million on Thursday.
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However, despite winning the second-highest prize of the year from the Massachusett’s Lottery Money Maker game, a key decision saw them lose a third of the windfall.
The lottery player who has not been named opted not to collect their check in person, which is allowed in Massachusetts.
Instead, the winner set up a trust, and trustee Leo Cushing from K & K Trust of Walham picked up the check.
Cushing will then deposit the money into a bank account set up for the anonymous lottery winner.
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However, this lotto winner will not get the full prize.
Upon collection of the check, winners who scoop big prizes are confronted with a difficult decision.
They can either immediately take home a smaller lump sum or cash prize or they can get the full amount split over annual installments.
For the Massachusetts winner, Cushing opted to take home the cash option of $9.75 million before state and federal taxes.
Cushing revealed that the winner wants to use the money to support their children and extended family.
The winner purchased the lucky ticket at One Stop Mart in Lynn.
Just for selling the winning ticket, the store will also receive a cash prize of $50,000.
Another lottery player also scooped the $15 million prize back in June and like this anonymous winner, also opted for the immediate cash prize.
This is the most common decision, according to a lottery lawyer who has represented what he calls “lottery losers” in court – these are winners who quickly lost most or all of their money.
At least “90 percent of all lottery winners take the lump sum distribution,” Lottery lawyer Andrew Stoltmann previously told The U.S. Sun.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
Experts have varying opinions on whether to take the lump sum or take the annuity.
He branded this decision “a pretty big mistake” after seeing numerous winners go from being on top of the world to rock bottom.
Stoltmann claims that issues come about with the lump sum because most people who win such huge amounts of money do not have the support to deal with it correctly.
“They tend to be from lower socioeconomic backgrounds,” he said.
“So they then take this massive sum of money and they just don’t really know what to do with that.”
It is imperative to think carefully about taking on such a large amount of money so quickly and to consider if there is enough financial and legal support to do so.
Meanwhile, Powerball players have been urged to check their tickets with less than 30 days left to claim a $50,000 prize.
