[ad_1]
A lottery winner found that she could only cash in a portion of her “unbelievable” jackpot win due to a little-known loophole. This rule resulted in her having to pay more than £50,000 in taxes to access the money.
Ashley Smith, from Mason County, Kentucky, purchased the lucky lottery ticket last year after putting her children to bed.
The mother-of-two said: “I was just waiting for the kids to go to sleep and decided to play.”
She jumped out of excitement as the Bank Buster online jackpot appeared on her screen, prompting Ashley to leap out of her bed in disbelief.
Her husband said in a press statement: “I thought she was pretending. I called my mum, and she couldn’t believe it either.”
The next morning, the entire family drove to the Kentucky Lottery headquarters to claim their £176,000 prize, but due to an obscure loophole, they only walked away with £126,200.
When collecting lottery winnings, individuals typically have two options: a lump-sum payment or annuity payments spread over 29 years.
Choosing the lump-sum option, the family ended up paying £50,000 in taxes.
Many financial advisors recommend the lump-sum choice, as it allows winners to take immediate control of the money.
Experts suggest assembling a team of professionals, including financial planners, lawyers, and accountants, to navigate the complexities of managing newfound wealth.
Legal specialist Andrew Stoltmann highlighted the often overlooked drawbacks, noting that a significant percentage of lottery winners eventually file for bankruptcy.
He told the US Sun: “They then take this massive sum of money and they just don’t really know what to do with that.”
However, he added, those who opt for annual payments are shielded from losing their entire winnings at once.
While the annuity option can help protect winners from impulsive spending and financial instability, it does require them to make yearly claims during tax filings.
[ad_2]
