Is this "advice" on rotten.com to lottery winners even feasible?

From this link:

http://www.rotten.com/library/culture/lottery-winners/

Specifically this tidbit:
Open a blind trust. Hire a tax attorney. Once you’re a client, the lawyer is legally bound to maintain your confidentiality. Tell them you want to open a blind trust in order to claim the lottery prize as an anonymous trustee. Provide three photocopies of your ticket. All contact with the lottery commission will be made through your lawyer.

Could one really claim a lotterry jackpot in this way? It seems you would have to sign the ticket eventually, and I don’t think they would accept photocopies.

I was under the impression that most of the publicity around winning the lottery was so the state can prove they’re not doing anything shady and proving that the winner has absolutely no ties with the lottery commission. Under the circumstances in the rotten.com article, I’m sure that the state can refuse to award the money until the winner comes out of hiding.

The laws on this vary from state to state. There was one recent case of a trust being set up to cash in a lottery ticket which discussed on this board. (It might have been NJ???) In that thread, other posts listed states where the actual winning person has to claim the prize.

So, check you state’s lottery laws.

It should be obvious that three (or 33) photocopies of a lottery ticket won’t get you the money.
You will have to produce the actual ticket to get paid. If you let your lawyer, or even your mother, hold the ticket for you, you’re a bigger fool than most.

If you had a couple of witnesses with you when you turned the ticket over to your lawyer (let’s say including an off-duty sheriff’s deputy you hired to escort you to your attorney’s with your ticket) I think you would have a fairly good chance at having some recourse.

Unless you and your attorney had the same name and similar signatures, I’m not sure he’d get away with impersonating you. Don’t lottery tickets have a spot on the back to fill out your name and signature?

Yes, but that defeats the whole purpose of the question asked in the OP.

You must provide the original ticket in most cases. In CA, you may remain anonymous as far as lottery publicity goes (but they really want to use your name and picture) but you cannot claim the prize anonymously. The IRS frowns on that sort of thing.

So, the gov’t will know and the state lottery will know. You don’t have to tell anyone esle, and you can prevent the lottery from doing so as well.

If the OP was hinging entirely on the lawyer’s obligation to keep the transaction private, then no, it wouldn’t.

I rather suspect that there isn’t a great deal a lawyer can do to make the lottery overseers grant large cash sums to anonymous people, though. That check’s gotta be made out to somebody.

Please read the article linked to in the OP.

The trust claims the lottery ticket.
The trust is the payee on the check.
The trust deals with paying taxes.

Don’t you have to prove you are eligible to win it also?

The trust might not be eligible to win a lottery.

Which of course I pointed out in my first post.

I’m not sure of what the US position would be, but in most Common Law jurisdictions, Trusts are not legal entities and cannot hold or possess any property. A trust is actually a short hand method of identifying an obligation on a person or company, that is capable of owning property at law, that they do so for the benefit of another party. The trustee owns the property at law but is subject to the beneficiary of the trusts right to gain the actual benefit from the property.

This would make it impossible for the trust to claim the lottery ticket as it would have to be all done in the name of the Tax Attourney, and who it seems to be the opinion of the board would not be allowed to claim the ticket as they didn’t purchase it. Throwing the Trust in the way as an attempt to make it impossible to identify the beneficiary does not seem to solve the problem.

Of course, there is this statement written before all of the listed “suggestions”:

**

How about this?

  1. You get trustworthy witnesses for step two.
  2. You hand your ticket to the lawyer.
  3. The lawyer cashes in the ticket, and never makes mention of his client.
    [Is this illegal? Is he ever asked point-blank if he is cashing it for a third party? Lawyers are good at keeping their mouths shut when they’re not asked things very directly.]
  4. The lawyer places the money in an escrow account.
  5. The lawyer pays taxes on the lottery winnings out of the escrow account.
  6. The lawyer deducts his fees from the escrow account.
  7. The lawyer sets up a nice fat “You Family Trust” and places the contents of the escrow account in the trust fund.
    [Here’s the tricky part… if he already paid taxes on the money, is there a gift tax for him doing step 7? It seems there would be, unless you wanted to make the assertion that he was paying the taxes on your behalf, as the money was never actually his. Alternatively, you could just decide that you’ll pay the gift tax for step 7, which might eat 70% or so of your winnings. Then again, I’d take 30% of my state’s current jackpot payout and smile about it.]
  8. Okay, now you got yourself a nice fat trust fund. Now don’t tell anyone.

I’m not sure what they mean by “blind trust” here, but, as I understand the term, it doesn’t really have anything to do with anonymity. Usually, when a trust is a “blind trust,” it means that the beneficiary doesn’t know what assets are in the trust or what the trustee is doing with those assets. This is often done for politicians, in order to avoid charges of conflict of interest (you can’t be charged with favoring Corporation X because you’re a shareholder, if you didn’t know you were a shareholder).

I looked briefly at the rotten.com article, and it looks like they’re just listing suggestions to avoid publicity (and thus, to avoid moochers) rather than suggesting true anonymity. If that’s all you’re after, your only obstacle is, I think, the lottery organization’s marketing department.

However, I think it’s going to be hard to claim the money while remaining truly anonymous. If nothing else, the IRS and other taxing authorities are going to want to know where the money is going.

Also, I suspect that there’s more involved in claiming the prize than just presenting the ticket. In Texas, for instance, you have to fill out a form like this . Note that if you’re claiming the prize on behalf of a trust, you have to identify a person with authority over the trust (which might not be you, but will presumably be someone who knows who you are).

I see a few complications. First, I suspect that the lawyer will be asked if he’s cashing it on behalf of someone else. I don’t know how all the lottery agencies work, but I suspect there’s always going to be some paperwork involved, and it will ask for basic information like who the ticket owner is.

You could have the lawyer claim the prize in his own name. This would probably require you to formally make a gift of the ticket to the attorney, which many people might be wary of doing. Also, as you note, I think this would have some adverse tax consequences. When the attorney gives you the proceeds (or gives them to your trust, or whatever), I suspect that that will be a taxable gift (and come to think about it, your gift of the winning ticket to the lawyer might be a taxable transaction, too).

Finally, keep in mind that once the money is in your hands (directly or through a trust), any income you earn on it will be taxable, and will have to be reported to the IRS.

So, like I said, keeping your name out of the papers might be possible, if the lottery people will cooperate. Keeping your prize secret from the government is probably not.

Of course, having the lawyer cash it in his own name means that he will have exactly the same problems you would. If there are crazy stalker guys around, maybe they’ll find out it was you who won anyway.

Is this really a big issue? If I go and cash in my winning lottery ticket, do they put up giant bill boards with my name and street address? I thought it was possible to have the lottery company keep your name private.

I would agree with not telling anyone, and in fact, not spending even a cent, until I had calmed down from the excitement and was in a better position to make rational decisions. I’d definately be a little frightened by the sudden change in my life. But I’d get over it :stuck_out_tongue:

You know, if someone in my family was a lotter winner, I’d not know it unless they did the obvious stupid stuff like living beyond their non-lottery means. People that win the lottery don’t get that much publicity any more – it’s more boring and routine than a NASA launch. No one really cares. Sometimes there’s a human interest angle about 10 grandmothers who won a lottery pool, but beyond that, where’s all the press that we’re to worry about?

Yeah, I’m sure there’s a small percent of bozos who prey on lottery winners by actively seeking them out, but this is probably a smaller number of people that go begging Bill Gates for money on a daily basis. I kind of envision kooks like on the movie Brewster’s Millions.