An Anonymous Powerball Winner? How?

Can someone explain (see link below) how a lottery winner, esp. a Powerball winner, was permitted to remain anonymous? Everyone knows you lose such privacy in the terms of accepting the prize. I should add that the winner was a “Trust”. What does this mean, exactly? The winner died and left the winning ticket as part of his/her estate? Can anyone set up such a “Trust” to remain anonymous? I’m such many a winner would have loved to have remained unknown. How come the special treatment here?

  • Jinx :confused:


As far as I understand it, the process works something like this: I hold the winning ticket. Not wanting the publicity, I set up a trust (any good lawyer can do this for you in a matter of hours). Next, I name myself as the executor of that trust, meaning I get to do with the money in the trust exactly as I please (within some limitations - a real lawyer will be around to explain further). Then, I have my lawyer anonymously donate the ticket to the trust.

I imagine this isn’t done very often because most people don’t know about it. Also, I imagine there may be some tax issues and/or some limitations on how the money can be used (if I’m executor of a $50 million trust, can I just transfer a few hundred thousand to my regular checking account when the mood strikes me?).

Hey Homie, does one actually turn the winning ticket over to the lawyer? Isn’t this risky, if the ticket is worth enough to chance running away with the money?

  • Jinx

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.

Hey, that’s a good idea. When I win the Lotto (har), I’ll look into this. Can you imagine all the long-lost relatives, grifters, marketers, etc., who would descend upon you should they hear on the news that you were the big winner?

IIRC correctly from my Trusts class - if the same person (the settlor) was both the trustee and the sole beneficiary - then you wouldn’t have proper parties for a trust.

It seems to me like the legal title and equitable title would be in the same person and the trust would be no more.

  • Peter Wiggen

Yeah, that’s true, but all you need to avoid that is a successor beneficiary. If the trustee is the sole beneficiary of the trust, then the titles merge and the trust is done. But, if you put in a clause naming your kids or Aunt Susie or your cat as successor beneficiary, then the titles remain split.

Well, the Powerball site isn’t a lot of help, and doesn’t seem to have specifics, but says Delaware allows winners to remain totally anonymous.

Trust? Lawyer? Anyone see a problem using both in the same sentence, let alone the same thought?


Yeah, yeah, I know we have a few lawyers here. No slight intended.