When I read the thread title, I thought, “I wonder if you could stay anonymous by setting up a trust?” Guess so.
Here’s basically how it would work. HeyHomie got most of it…I’ll just try to clean up some details and terminology.
There are three important parties to a trust:
Settlor: the person who creates/funds the trust
Trustee: the person who holds legal title to the trust property and has the fiduciary responsibility to protect the property and administer the trust according to the terms of the trust.
Beneficiary: the person who holds equitable title to the trust property, i.e., the person who the trustee distributes the property to, subject to the terms of the trust.
So, if you win the lottery, you could create a trust (making you the settlor) and fund it with the lotto ticket. As HeyHomie mentioned, any lawyer can do this. It’s not hard. An important point is that the trust document is not a public record. It does not have to be filed anywhere or shown to anyone except the parties involved.
You name the attorney as trustee and yourself beneficiary of the trust (it’s fine for the same person to be both settlor and beneficiary. That same person could be trustee, too, but that would pretty much kill the anonymity).
The trust document would set out the trustee’s obligations, which in this case would be to claim the winnings and distribute the entire amount to the beneficiary. Pretty simple.
I’m not a tax attorney, but I don’t think there would be any tax implications to this. When you settle a trust for your own benefit, the IRS treats it like you still own the property, so there are no benefits or disadvantages to such an arrangement from a tax standpoint.
One disadvantage that I can think of is that the trustee is entitled to a fee for his service. This could be pretty significant if it is based on a percentage of the trust assets. (follow up: Looks like under NH law there is no set percentage that the trustee is entitled to, so the fees would just be set out in the trust instrument. NH St. § 564:21 looks like the applicable statute, but IANA New Hampshire attorney).
As for riskiness in turning over the ticket, I guess the lawyer could cash it and take off for an island in the caribbean, but under the law, he has no right to use the funds for anyone’s benefit except the beneficiary. If he loses the money through negligence or fraud, he is personally liable to the beneficiaries.