> If you are really paranoid, you might consider picking another G7 or otherwise mainstream country other than the U.S. according to where you want to live if the United States dissolves into anarchy or Britney Spears is elected to the United States Senate.
Ah, 2014. Such a bright, optimistic time to be alive.
I'm not sure I do. She opted into a transparent system and gets the down side that comes with it (or opts out). If this was thrust upon her, I might feel different. I fear the precedent this would set for redacting names from Forbes lists and the like. It's one of those unfortunate occurrences where openness and privacy are in conflict and when it's government actions like this, arresting someone, awarding some other monies to someone, etc I think openness should prevail.
I don’t see the value in sticking to this legal technicality. She could have accepted the ticket using an anonymous trust, but since she signed it with her own name instead, she’s not allowed to change it. Since anonymous trusts are already legal there, there’s no threat of “losing openness.”
I mean come on, that’s such a petty technicality for such a massive life event. Just let her set up the anonymous trust and move the ticket to it.
I don't really appreciate skirting "technicalities", especially in a precedent-setting legal decision. If the law is wrong (or even if the spirit/intent of the law does not apply here), she should win and the law should change or be struck down. I wouldn't mind if the judge decided "it's illegal to make someone who signed a lottery ticket with their real name not change to a trust and keep their name hidden." But I would mind if the judge decided "I feel sorry for her, in this one instance she can remain anonymous."
If you read any legal opinions in visible cases they are never just the judge feeling or not feeling sorry for the plaintiff (or defendant) and are deeply steeped in the law as written as well as precedent before even approaching making new precedent. Maybe a judge could comment but I’d venture they would almost avoid territory that would be ripe for appeal as much as possible.
Judges that aren't on specialized tribunals aren't expected to, and mostly don't, know the law (because it's quite impossible) - they rely on the Barristers to inform them, then get their clerks to do some digging to see if the briefs are on point. The higher up you go in the chain, the more clerk time they have to research and the more control they have over how long they take to put out their ruling.
Junior judges are more reticent to rock the boat - they have less resources, less understanding of how the judicial boards and other oversight mechanisms work, etc. Old greybeards generally stop caring - either about bothering to change things or about how 'safe' their ruling will be on appeal. The most active in tossing bad precedent out the window generally end up being the ones that get appointed to higher ranking courts.
>If the law is wrong (or even if the spirit/intent of the law does not apply here), she should win and the law should change or be struck down.
That's orthogonal. What you propose translates to that while the law is not changed (which can take decades in some cases) we should let people suffer rather than "skip technicalities" when we can.
How about sodomy laws (still present in some jurisdictions). Should they be imposed upon gay men until those laws change? And no biggie if people suffer in the meantime?
> That's orthogonal. What you propose translates to that while the law is not changed (which can take decades in some cases) we should let people suffer rather than "skip technicalities" when we can.
You misunderstand me. I am saying if the law is wrong, she should win (and so should everyone else, every time, while the law is wrong). I am also saying if the law is wrong, it should change or be struck down. I am not saying she should lose until the law is changed.
By making it easier to change the official winner future people might suffer much more if it becomes easier to challenge an award.
Just as a practical matter, people are more likely to litigate an award _before_ the award is disbursed. "Dumb" rules that require an entity to disburse funds to a specific named person contingent upon some simple formality have actually arisen because more robust rules that carefully balance interests and facts (including fraud) can create too much litigation. Those more robust rules are important to keep, but sometimes simply deferring a challenge until after disbursement can cut down on the amount and overall cost of litigation. For one thing it completely removes one of the 3 parties; in this case the agency administering the lottery.
For example, there are rules (legislative and court made law) for things like life insurance policies and bank accounts that require the entities disbursing the funds to pay directly to a named beneficiary, even if ownership of those funds could be and actually is being challenged in, say, probate court. And you can't circumvent the rules by asking a court to change the named beneficiary; that would defeat the whole purpose of the rule, and courts normally won't do that even if they know that, ultimately, the challenger will ultimately be given the funds.
That's the question here, whether the rules being challenged here are the kind of rules intended to prevent litigation that ropes in the agency administering the lottery. If so and the court makes an exception here, it would be difficult if not impossible to prevent other scenarios where challengers try to force the agency to change the name of the winner rather than directly suing the winner after disbursement. The former is often less costly for the challenger and could easily invite more litigation that challenges rightful ownership of a lottery ticket.
I think this should set a precedent, and I am quite confident that it wouldn’t cause any problems other than the lottery being upset about losing publicity.
I think that's reasonable and would not be surprised if the judge says that the harm placed on the individual by the state just for participating is too large, legally. But I would also not be surprised if public's right to know trumps all.
I'm not sure what the compelling public interest is in knowing the name of the person who won the lottery. I suppose there's some argument for transparency to better protect against, say, relatives of lottery officials regularly winning. But I presume there are other safeguards in place to check that things are run on the up and up.
The state gets their substantial cut--both through the lottery itself and through taxes--either way. Without having looked into the history of lottery practices, I'm pretty unconvinced that winners need to be outed to collect their winnings.
We should ask our judges not to legislate from the bench by giving narrowly construed decisions contrary to the written law that apply to nobody else. Either every lottery winner in the state is legally right to remain anonymous and collect (be it via changing to a trust whilst remaining anonymous or however) or every one is not. This is not some extreme example and I can definitely see this coming up again.
>We should ask our judges not to legislate from the bench
Why not? This is a core facet of their job.
The tug of war in law between flexibility and certainty is nothing new.
In this case you've state the outcome should be either all entitled to anonymity or all restricted from anonymity. Why are those the only two options?
Say sociological research shows: 1) people conceal lottery earnings from spouses in the context of divorce with tremendous regularity, and 2) people who obtain lottery earnings are 10x more likely to be killed by distant, financially-at-risk relatives. Should a lottery winner with 3 violent felons with debts in his family be dealt with in the same manner as an upper middle class winner in the middle of a divorce?
This is why our judges get to tinker with our rules. Because real life has edge cases.
>This is why our judges mostly do not get to tinker with the rules.
They mostly don't tinker, not because they aren't allowed, but because rules are designed to capture the base case, so most cases are anticipated by the rules.
This is why most reviews and reporters do not list every banal dispute.
Very few people talk about this, but there are two categorically different forms of judicial activism - one where judges carve out from themselves or the executive or legislature, powers (usually regulatory) from whole cloth. And one where judges restrict the power of the state (e.g. "the state cannot arrest someone for burning the flag, whether or not such a law exists").
Which one would you suppose a ruling on this falls under?
> Which one would you suppose a ruling on this falls under?
The latter hopefully/clearly. But I don't consider it activism to uniformly apply your interpretation of the law. The activism I was concerned about is narrow application in this supposedly "exceptional" circumstance. Is that a "third form" or is it an extension of the first except they carved it out for someone else?
The problem is allowing people to challenge the process, ex post facto, by which a winner is established. You can't think of any reason why making it easier to challenge that process--to change the outcome--might be problematic for an agency tasked with giving away hundreds of millions of dollars? Finality is one of the primary functions of rules and laws--of justice--often more important than getting a "correct" outcome in any particular case, especially in cases such as this where the woman is free to return to the status quo ante by forgoing the winnings altogether.
And in as much as courts can make and change laws, they must do so on principle, almost always by applying or extending some pre-existing principle of law. It can be difficult to articulate a principle cabined to the particular facts of a single case. It's much easier for legislatures to do that--to craft a rule that literally recites the facts of this woman's case so that the exception only applies to her and to people facing her exact same circumstance.
Maybe the court can do that in this case. We just shouldn't make the mistake of thinking it's an easy case to resolve.
I don’t get it. No one is challenging the owner of the ticket, as far as I can tell. This woman is the owner. So, assuming they can confirm that she is the rightful owner right now using whatever existing process is in place, then why not do that confirmation, then let her choose to assign the winnings to an anonymous trust?
I can't say for sure but I doubt the court would let you challenge the process so easily if you didn't have a winning ticket, because you wouldn't have standing.
However, for your "Forbes" example the law makes a distinction between a public person and a private person.
Many many "private" people successfully sue Forbes to get off their annual "kidnap and ransom" list. The key to being declared a private person is never making public comments or speeches, etc.
Many many "private" people successfully sue Forbes to get off their annual "kidnap and ransom" list.
Citation needed. Something like that would be pretty big news, especially considering that Forbes will voluntarily redact names of individuals from their list if requested, no lawsuit required.
> If this was thrust upon her, I might feel different.
While it’s not thrust upon her in the sense that someone held a gun to her head to force a ticket purchase, her options are severely limited due to state’s monopoly on lottery business. If some entity (including another state) came up with an anonymous lottery system to serve such market, most likely she would not be able to legally purchase such tickets in her home state.
I'm with you, but mostly because I hate the lottery system and think it's a shitty mechanism for the state to extract even _more_ money out of the poorest and most destitute by preying on their hopes and dreams. Not to mention, it's very possible it's being used as a mechanism for organized crime: http://www.pennlive.com/watchdog/2017/09/defying_the_odds_pa...
I don't think it was that transparent. She followed instructions that she was given by the commission and the result was not what she wanted. She could have put the name of the trust on the ticket instead of her own name, but she was given bad advice by the official website.
re: redacting names from Forbes lists and the like - and if it did? What is the point of said lists beyond a congratulatory pat on the back for those who want it?
In this particular case, there is precedence where winning has been detrimental to the winners specifically for the sake of winning (scams, murders, etc.). I think that substantially outweighs the "need" for transparency of the lottery system to seem above board. Just continue to highlight where the ticket was sold and that it was a John/Jane Doe unless the person wants to opt into disclosing identity and call it a day.
This assumes you trust your government to actually award it to someone and you trust the ones running the lottery that who it was awarded to happened actually by chance. Because you'll never be able to investigate either without making the information available to someone outside the government (and even then, do you trust an "independent" auditor?). Transparency in government actions has value sometimes, even at the detriment of individuals. But it's not at all costs and I do agree a balance could be found between the public's right to know and scrutinize and a person's right to privacy.
while that is very true, but what guarantees do I have that the people winning it publicly aren't actors, friends/family of lottery workers, etc.?
If I'm willing to pony up money at absurd odds for a chance to win a larger stack of money, honestly, I don't know how much private/public disclosure of winner is going to affect that. People go to casinos to gamble where the games are inherently stacked against you yet continue to do so.
I just think it is a concern for transparency that need not be there, honestly. Obviously, that's just an individual's opinion, but I don't think it benefits to the degree is assumed. There are some states in which you can win anonymously, and their lotteries are doing fine.
Did the lottery ticket have an EULA on it giving all the conditions of the win? What was the mechanism in place making sure that the purchaser fully understood the provisions of the agreement prior to making the lottery purchase?
Are you siding with the state on this merely because it's a state? Would you feel the same way if it were microsoft?
> Are you siding with the state on this merely because it's a state?
No, and I definitely don't side with the state because it was in the rules. To me, what's legal matters, not what you signed away. When I say "opt in" vs "opt out" I am talking about the known inherent risks of publicity, not about whether you can change the name you sign or other fine print. I am just conceding the argument for transparency has merit.
Think we can assume none of it is true. Seems a bit alarmist. At most its no different than what any other wealthy person has to deal with. Welcome to being rich.
The follow up is pretty good advice too and is the advice I have been given by lawyers I know that are familiar with these problems... also they have all advised getting the hell out the country for awhile. Congrats, you are taking a two-week vacation in London or Paris. Long enough to get paperwork dealt with and short enough that it does not need explanation to family, friends or colleagues.
That Reddit thread is really great. One idea they don't mention is that perhaps the extreme transparency of winning the lottery should include anyone who begs for money. That is to say, the lottery winner should bring a camera with them everywhere they go, film every beggar and harasser, and post all the footage on YouTube. This would of course require a good bodyguard or two.
I think that's what I would do. When someone is about to start their pitch, I would tell them the rules: if you pitch to me, you must do it on camera, in public. Otherwise, I'm calling my bodyguard.
Except the biggest problem will be friends or family that suddenly all “need help” because they spend their money frivolously or suddenly their car breaks. That or you get totally pushed out because you weren’t generous enough.
My mother-in-law got an accident settlement 20 years ago. Suddenly, foreign "relatives" she'd never met were calling her for handouts (and that's besides the relatives that she knows who were asking).
I really disagree with the common advice to take the lump sum - unless the winner is elderly. It seems to be centered on the idea that you can earn more interest/dividends yourself, but there are a few problems with that.
1. To get higher rates of return, you expose yourself to more risk of losses. The risk is real, i.e., you could lose everything.
2. You need even better (riskier) returns to pay for all the legal/investment/accounting advice because lottery winners rarely have experience here, at least not in the first year.
3. You need even better returns (and more risk) to make up for the taxes you pay up front. The annuity is based on pre-tax funds, and federal tax is much higher than the 25% initial withholding.
4. A $2-3 million windfall is more than enough to live on a sensible six-figure budget and get some practice with investing. If you screw up, you get another windfall next year. Just avoid debt.
5. Will taxes go up in 10 years? Who cares. They won't go to 100%. Even if you lose everything for 9 years straight, you'll still be rich in 10 years with far more certainty than if you took the lump sum. Just stay out of debt.
You are ignoring political risk eg in 15 years that state government changes the rules and sequesters the money - this actually happened in the UK to the SERP pension I lost mine for a small uplift in the state pension when they changed the rules.
You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
Illinois has had difficulty recently paying lottery winnings to citizens. In 2015, 3900 winning tickets had delayed payouts [0]. Risk should always be factored into financial decisions, and risk of a lottery institution going insolvent is non-zero.
They did pay, but yes, nothing is completely risk-free. The risk of a lottery winner losing their lump sum to mismanagement, fraud, etc. is still a lot higher than the risk of a state going belly-up, although maybe Illinois will be the one to change that.
> You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
The "now" and "later" lottery payment options do not offer equal nominal amounts, so it doesn't make sense to just say "you're ignoring the time value of money". The regular payment pays out more nominal money because of the time value of money. You could argue that they're getting it wrong, but that's a radically different argument.
> You also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
The lump sum is generally pretty close to what an annuity from a reputable company would cost, so the time value of money is already factored into it. Of course, you might prefer a riskier investment for higher returns, but that is really dependent on your risk tolerance, it's not a complete no-brainer to go with the lump sum.
First, the withholding rate is immaterial, it's clearly not enough to meet the tax obligations, you'll owe much more, and should start paying quarterly estimated taxes right away.
Because the annuity is pre-tax, the annuity payments will be taxable. There is some positive tax benefit of spreading the income over many years, because you have a lower marginal tax rate on the bottom of the bracket, but if the annual payments are $2-3 million, there's still a large amount taxed at the maximum rates.
In addition, if you take the lump sum, and invest it, your gains will likely be in the form of qualified dividends, and long term capital gains, which have more favorable tax treatment. If you invest in tax-exempt bonds, you won't pay any tax on the bond payments (but can still have taxable capital gains or losses on the bonds themselves).
The behavioral factors are much more compelling.
I would also take issue with 2; you can take the lump sum and dump it in a Target Date 2030 fund, and be done with it. It's not tax optimized, but whatever, it's easy and done. Yes, you need an estate attorney to help you draw up wills and/or living trusts, but that's not a big deal either. Also, get a big umbrella insurance policy to cover whatever. Because there's no way to shelter the lump sum (or annuity) payments from taxes, and because future capital gains will have preferential treatment, there's not much reason to spend a lot of effort on heroic tax avoidance. You probably need to spend a little bit more on legal advice when you take up new ventures than you would otherwise, but that's only needed when you take up the new venture.
Huh? You could still have all those benefits if you took the lump sum. Just put it in index funds and extract as needed. Stocks deemed too risky? Put it in bonds. It will still be better than the pathetic interest rate offered by the lottery's annuity.
If you win the Powerball tomorrow and take the annuity, you'll take home about $2 million after taxes. You can put $1 million in index funds and try to scrape by on the other $1 million for a year, by which time you'll be more knowledgeable and better equipped to deal with next year's slightly larger payout. I'm assuming the abstract "you" are a typical lottery winner and not an experienced and well-connected investment banker.
The main reason to take the lump sum is if you want to do things that cost more than the annuity. For example, starting a company, purchasing a company, running a political campaign, giving a large donation (e.g. endowing a position at a university), etc.
Those are just a few of the ways a typical rags-to-riches lottery winner (with tons of encouragement from an entourage of friendly and helpful advisors) is likely to end up broke in 10 years, and exactly why I'd expect the annuity to be more profitable for them in the long run.
Yeah, that. It always amazed me that Eric Schmidt spent millions every year on personal security for himself and his family. But the reality is that for some people it is "easier" to find someone with money and force them to give it up than it is to get the money legitimately.
The comments about family really resonate. I did not realize that so many of these folks were being killed by family members, that seems a bit extreme.
https://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_...
Winning the lottery (publicly, at least) seems to be a real monkey's paw wish.