Let's say you just won the lottery (in the US). What is the smartest way to give money to your friends?
Let's say you just won the lottery (in the US). What is the smartest way to give money to your friends?
I don't know why stuff like this keeps me up at night but let's pretend you just won some obscene amount and there's a lot of people you'd like to set up for life. Let's say after taxes you have $300m in your account
You can give someone up to 18k a year without incurring a gift tax and while that'd definitely be a nice bump to their income, you still have way more money than you know what to do with. So what's the smartest way to hook them up?
A couple of options I've considered are:
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Give them a lump sum of $X million. They eat the taxes the first year and handle the savings themselves.
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Create a company and hire them to "work" one hour a month for a big salary. If you put $25m in an account, the interest covers the salary. They get a steady bonus income with the added bonus of getting the best insurance available. Is that legal?
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Set up a "shared" checking account they can use to pay for...whatever. But would these expenses count towards the gift tax? I do not know.
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Buy houses and let them live there rent-free. I don't really like this one because I don't want to be a lord to my friends and family.
For the record, I did not win the lottery. I don't even play it. I'm just working out the details in a fantasy world for some reason
From Reddit. I hope I got it all, it should be memorialized forever.
Congratulations! You just won millions of dollars in the lottery! That's great.
Now you're fucked.
No really.
You are.
You're fucked. If you just want to skip the biographical tales of woe of some of the math-tax protagonists, skip on down to the next comment. To see what to do in the event you win the lottery.
You see, it's something of an open secret that winners of obnoxiously large jackpots tend to end up badly with alarming regularity. Not the $1 million dollar winners. But anyone in the nine-figure range is at high risk. Eight-figures? Pretty likely to be screwed. Seven-figures? Yep. Painful. Perhaps this is a consequence of the sample. The demographics of lottery players might be exactly the wrong people to win large sums of money. Or perhaps money is the root of all evil. Either way, you are going to have to be careful. Don't believe me? Consider this:
Large jackpot winners face double digit multiples of probability versus the general population to be the victim of:
Homicide (something like 20x more likely) Drug overdose Bankruptcy (how's that for irony?) KidnappingAnd triple digit multiples of probability versus the general population rate to be:
Convicted of drunk driving The victim of Homicide (at the hands of a family member) 120x more likely in this case, ain't love grand? A defendant in a civil lawsuit A defendant in felony criminal proceedingsBelieve it or not, your biggest enemy if you suddenly become possessed of large sums of money is... you. At least you will have the consolation of meeting your fate by your own hand. But if you can't manage it on your own, don't worry. There are any number of willing participants ready to help you start your vicious downward spiral for you. Mind you, many of these will be "friends," "friendly neighbors," or "family." Often, they won't even have evil intentions. But, as I'm sure you know, that makes little difference in the end. Most aren't evil. Most aren't malicious. Some are. None are good for you.
Jack Whittaker, a Johnny Cash attired, West Virginia native, is the poster boy for the dangers of a lump sum award. In 2002 Mr. Whittaker (55 years old at the time) won what was, also at the time, the largest single award jackpot in U.S. history. $315 million. At the time, he planned to live as if nothing had changed, or so he said. He was remarkably modest and decent before the jackpot, and his ship sure came in, right? Wrong.
Mr. Whittaker became the subject of a number of personal challenges, escalating into personal tragedies, complicated by a number of legal troubles.
Whittaker wasn't a typical lottery winner either. His net worth at the time of his winnings was in excess of $15 million, owing to his ownership of a successful contracting firm in West Virginia. His claim to want to live "as if nothing had changed" actually seemed plausible. He should have been well equipped for wealth. He was already quite wealthy, after all. By all accounts he was somewhat modest, low profile, generous and good natured. He should have coasted off into the sunset. Yeah. Not exactly.
Whittaker took the all-cash option, $170 million, instead of the annuity option, and took possession of $114 million in cash after $56 million in taxes. After that, things went south.
Whittaker quickly became the subject of a number of financial stalkers, who would lurk at his regular breakfast hideout and accost him with suggestions for how to spend his money. They were unemployed. No, an interview tomorrow morning wasn't good enough. They needed cash NOW. Perhaps they had a sure-fire business plan. Their daughter had cancer. A niece needed dialysis. Needless to say, Whittaker stopped going to his breakfast haunt. Eventually, they began ringing his doorbell. Sometimes in the early morning. Before long he was paying off-duty deputies to protect his family. He was accused of being heartless. Cold. Stingy.
Letters poured in. Children with cancer. Diabetes. MS. You name it. He hired three people to sort the mail. A detective to filter out the false claims and the con men (and women) was retained.
Brenda, the clerk who had sold Whittaker the ticket, was a victim of collateral damage. Whittaker had written her a check for $44,000 and bought her house, but she was by no means a millionaire. Rumors that the state routinely paid the clerk who had sold the ticket 10% of the jackpot winnings hounded her. She was followed home from work. Threatened. Assaulted.
Whittaker's car was twice broken into, by trusted acquaintances who watched him leave large amounts of cash in it. $500,000 and $200,000 were stolen in two separate instances. The thieves spiked Whittaker's drink with prescription drugs in the first instance. The second incident was the handiwork of his granddaughter's friends, who had been probing the girl for details on Whittaker's cash for weeks.
Even Whittaker's good-faith generosity was questioned. When he offered $10,000 to improve the city's water park so that it was more handicap accessible, locals complained that he spent more money at the strip club. (Amusingly this was true).
Whittaker invested quite a bit in his own businesses, tripled the number of people his businesses employed (making him one of the larger employers in the area) and eventually had given away $14 million to charity through a foundation he set up for the purpose. This is, of course, what you are "supposed" to do. Set up a foundation. Be careful about your charity giving. It made no difference in the end.
To top it all off, Whittaker had been accused of ruining a number of marriages. His money made other men look inferior, they said, wherever he went in the small West Virginia town he called home. Resentment grew quickly. And festered. Whittaker paid four settlements related to this sort of claim. Yes, you read that right. Four.
His family and their immediate circle were quickly the victims of odds-defying numbers of overdoses, emergency room visits and even fatalities. His granddaughter, the eighteen year old "Brandi" (who Whittaker had been giving a $2100.00 per week allowance) was found dead after having been missing for several weeks. Her death was, apparently, from a drug overdose, but Whittaker suspected foul play. Her body had been wrapped in a tarp and hidden behind a rusted-out van. Her seventeen year old boyfriend had expired three months earlier in Whittaker's vacation house, also from an overdose. Some of his friends had robbed the house after his overdose, stepping over his body to make their escape and then returning for more before stepping over his body again to leave. His parents sued for wrongful death claiming that Whittaker's loose purse strings contributed to their son's death. Amazingly, juries are prone to award damages in cases such as these. Whittaker settled. Again.
Even before the deaths, the local and state police had taken a special interest in Whittaker after his new-found fame. He was arrested for minor and less minor offenses many times after his winnings, despite having had a nearly spotless record before the award. Whittaker's high profile couldn't have helped him much in this regard.
In 18 months Whittaker had been cited for over 250 violations ranging from broken tail lights on every one of his five new cars, to improper display of renewal stickers. A lawsuit charging various police organizations with harassment went nowhere and Whittaker was hit with court costs instead.
Whittaker's wife filed for divorce, and in the process froze a number of his assets and the accounts of his operating companies. Caesars in Atlantic City sued him for $1.5 million to cover bounced checks, caused by the asset freeze.
Today Whittaker is badly in debt, and bankruptcy looms large in his future.
But, hey, that's just one example, right?
Wrong.
Nearly one third of multi-million dollar jackpot winners eventually declare bankruptcy. Some end up worse. To give you just a taste of the possibilities, consider the fates of:
Billie Bob Harrell, Jr.: $31 million. Texas, 1997. As of 1999: Committed suicide in the wake of incessant requests for money from friends and family. “Winning the lottery is the worst thing that ever happened to me. William âBudâ Post: $16.2 million. Pennsylvania. 1988. In 1989: Brother hires a contract murderer to kill him and his sixth wife. Landlady sued for portion of the jackpot. Convicted of assault for firing a gun at a debt collector. Declared bankruptcy. Dead in 2006. Evelyn Adams: $5.4 million (won TWICE 1985, 1986). As of 2001: Poor and living in a trailer gave away and gambled most of her fortune. Suzanne Mullins: $4.2 million. Virginia. 1993. As of 2004: No assets left. Shefik Tallmadge: $6.7 million. Arizona. 1988. As of 2005: Declared bankruptcy. Thomas Strong: $3 million. Texas. 1993. As of 2006: Died in a shoot-out with police. Victoria Zell: $11 million. 2001. Minnesota. As of 2006: Broke. Serving seven year sentence for vehicular manslaughter. Karen Cohen: $1 million. Illinois. 1984. As of 2000: Filed for bankruptcy. As of 2006: Sentenced to 22 months for lying to federal bankruptcy court. Jeffrey Dampier: $20 million. Illinois. 1996. As of 2006: Kidnapped and murdered by own sister-in-law. Willie Hurt: $3.1 million. Michigan. 1989. As of 1991: Addicted to cocaine. Divorced. Broke. Indicted for murder. Michael Klingebiel: $2 million. As of 1998 sued by own mother claiming he failed to share the jackpot with her. Janite Lee: $18 million. 1993. Missouri. As of 2001: Filed for bankruptcy with $700 in assets.EDIT: Continued below due to character limit
permalinkembedsaveparentreport[–]BlakeClass 2878 points 10 years ago
So, what the hell DO you do if you are unlucky enough to win the lottery?
This is the absolutely most important thing you can do right away: NOTHING.
Yes. Nothing.
DO NOT DECLARE YOURSELF THE WINNER yet.
Do NOT tell anyone. The urge is going to be nearly irresistible. Resist it. Trust me.
/ 1. IMMEDIATELY retain an attorney.
Get a partner from a larger, NATIONAL firm. Don't let them pawn off junior partners or associates on you. They might try, all law firms might, but insist instead that your lead be a partner who has been with the firm for awhile. Do NOT use your local attorney. Yes, I mean your long-standing family attorney who did your mother's will. Do not use the guy who fought your dry-cleaner bill. Do not use the guy you have trusted your entire life because of his long and faithful service to your family. In fact, do not use any firm that has any connection to family or friends or community. TRUST me. This is bad. You want someone who has never heard of you, any of your friends, or any member of your family. Go the the closest big city and walk into one of the national firms asking for one of the "Trust and Estates" partners you have previously looked up on http://www.martindale.com from one of the largest 50 firms in the United States which has an office near you. You can look up attornies by practice area and firm on Martindale.
/ 2. Decide to take the lump sum.
Most lotteries pay a really pathetic rate for the annuity. It usually hovers around 4.5% annual return or less, depending. It doesn't take much to do better than this, and if you have the money already in cash, rather than leaving it in the hands of the state, you can pull from the capital whenever you like. If you take the annuity you won't have access to that cash. That could be good. It could be bad. It's probably bad unless you have a very addictive personality. If you need an allowance managed by the state, it is because you didn't listen to point #1 above.
Why not let the state just handle it for you and give you your allowance?
Many state lotteries pay you your "allowence" (the annuity option) by buying U.S. treasury instruments and running the interest payments through their bureaucracy before sending it to you along with a hunk of the principal every month. You will not be beating inflation by much, if at all. There is no reason you couldn't do this yourself, if a low single-digit return is acceptable to you.
You aren't going to get even remotely the amount of the actual jackpot. Take our old friend Mr. Whittaker. Using Whittaker is a good model both because of the reminder of his ignominious decline, and the fact that his winning ticket was one of the larger ones on record. If his situation looks less than stellar to you, you might have a better perspective on how "large" your winnings aren't. Whittaker's "jackpot" was $315 million. He selected the lump-sum cash up-front option, which knocked off $145 million (or 46% of the total) leaving him with $170 million. That was then subject to withholding for taxes of $56 million (33%) leaving him with $114 million.
In general, you should expect to get about half of the original jackpot if you elect a lump sum (maybe better, it depends). After that, you should expect to lose around 33% of your already pruned figure to state and federal taxes. (Your mileage may vary, particularly if you live in a state with aggressive taxation schemes).
/ 3. Decide right now, how much you plan to give to family and friends.
This really shouldn't be more than 20% or so. Figure it out right now. Pick your number. Tell your lawyer. That's it. Don't change it. 20% of $114 million is $22.8 million. That leaves you with $91.2 million. DO NOT CONSULT WITH FAMILY when deciding how much to give to family. You are going to get advice that is badly tainted by conflict of interest, and if other family members find out that Aunt Flo was consulted and they weren't you will never hear the end of it. Neither will Aunt Flo. This might later form the basis for an allegation that Aunt Flo unduly influenced you and a lawsuit might magically appear on this basis. No, I'm not kidding. I know of one circumstance (related to a business windfall, not a lottery) where the plaintiffs WON this case.
Do NOT give anyone cash. Ever. Period. Just don't. Do not buy them houses. Do not buy them cars. Tell your attorney that you want to provide for your family, and that you want to set up a series of trusts for them that will total 20% of your after tax winnings. Tell him you want the trust empowered to fund higher education, some help (not a total) purchase of their first home, some provision for weddings and the like, whatever. Do NOT put yourself in the position of handing out cash. Once you do, if you stop, you will be accused of being a heartless bastard (or bitch). Trust me. It won't go well.
It will be easy to lose perspective. It is now the duty of your friends, family, relatives, hangers-on and their inner circle to skew your perspective, and they take this job quite seriously. Setting up a trust, a managed fund for your family that is in the double digit millions is AMAZINGLY generous. You need never have trouble sleeping because you didn't lend Uncle Jerry $20,000 in small denomination unmarked bills to start his chain of deep-fried peanut butter pancake restaurants. ("Deep'n 'nutter Restaurants") Your attorney will have a number of good ideas how to parse this wealth out without turning your siblings/spouse/children/grandchildren/cousins/waitresses into the latest Paris Hilton.
/ 4. You will be encouraged to hire an investment manager. Considerable pressure will be applied. Don't.
Investment managers charge fees, usually a percentage of assets. Consider this: If they charge 1% (which is low, I doubt you could find this deal, actually) they have to beat the market by 1% every year just to break even with a general market index fund. It is not worth it, and you don't need the extra return or the extra risk. Go for the index fund instead if you must invest in stocks. This is a hard rule to follow. They will come recommended by friends. They will come recommended by family. They will be your second cousin on your mother's side. Investment managers will sound smart. They will have lots of cool acronyms. They will have nice PowerPoint presentations. They might (MIGHT) pay for your shrimp cocktail lunch at TGI Friday's while reminding you how poor their side of the family is. They live for this stuff.
You should smile, thank them for their time, and then tell them you will get back to them next week. Don't sign ANYTHING. Don't write it on a cocktail napkin (lottery lawsuit cases have been won and lost over drunkenly scrawled cocktail napkin addition and subtraction figures with lots of zeros on them). Never call them back. Trust me. You will thank me later. This tactic, smiling, thanking people for their time, and promising to get back to people, is going to have to become familiar. You will have to learn to say no gently, without saying the word "no." It sounds underhanded. Sneaky. It is. And its part of your new survival strategy. I mean the word "survival" quite literally.
Get all this figured out BEFORE you claim your winnings. They aren't going anywhere. Just relax.
/ 5. If you elect to be more global about your paranoia, use between 20.00% and 33.00% of what you have not decided to commit to a family fund IMMEDIATELY to purchase a combination of longer term U.S. treasuries (5 or 10 year are a good idea) and perhaps even another G7 treasury instrument. This is your safety net. You will be protected... from yourself.
You are going to be really tempted to starting being a big investor. You are going to be convinced that you can double your money in Vegas with your awesome Roulette system/by funding your friend's amazing idea to sell Lemming dung/buying land for oil drilling/by shorting the North Pole Ice market (global warming, you know). This all sounds tempting because "Even if I lose it all I still have $XX million left! Anyone could live on that comfortably for the rest of their life." Yeah, except for 33% of everyone who won the lottery.
You're not going to double your money, so cool it. Let me say that again. You're not going to double your money, so cool it. Right now, you'll get around 3.5% on the 10 year U.S. treasury. With $18.2 million (20% of $91.2 mil after your absurdly generous family gift) invested in those you will pull down $638,400 per year. If everything else blows up, you still have that, and you will be in the top 1% of income in the United States. So how about you not fuck with it. Eh? And that's income that is damn safe. If we get to the point where the United States defaults on those instruments, we are in far worse shape than worrying about money.
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. Put some fraction in something like Swiss Government Bonds at 3%. If the Swiss stop paying on their government debt, well, then you know money really means nothing anywhere on the globe anymore. I'd study small field sustainable agriculture if you think this is a possibility. You might have to start feedng yourself.
/ 6. That leaves, say, 80% of $91.2 million or $72.9 million.
Here is where things start to get less clear. Personally, I think you should dump half of this, or $36.4 million, into a boring S&P 500 index fund. Find something with low fees. You are going to be constantly tempted to retain "sophisticated" advisers who charge "nominal fees." Don't. Period. Even if you lose every other dime, you have $638,400 per year you didn't have before that will keep coming in until the United States falls into chaos. Fuck advisers and their fees. Instead, drop your $36.4 million in the market in a low fee vehicle. Unless we have an unprecedented downturn the likes of which the United States has never seen, should return around 7.00% or so over the next 10 years. You should expect to touch not even a dime of this money for 10 or 15 or even 20 years. In 20 years $36.4 million could easily become $115 million.
/ 7. So you have put a safety net in place.
You have provided for your family beyond your wildest dreams. And you still have $36.4 million in "cash." You know you will be getting $638,400 per year unless the capital building is burning, you don't ever need to give anyone you care about cash, since they are provided for generously and responsibly (and can't blow it in Vegas) and you have a HUGE nest egg that is growing at market rates. (Given the recent dip, you'll be buying in at great prices for the market). What now? Whatever you want. Go ahead and burn through $36.4 million in hookers and blow if you want. You've got more security than 99% of the country. A lot of it is in trusts so even if you are sued your family will live well, and progress across generations. If your lawyer is worth his salt (I bet he is) then you will be insulated from most lawsuits anyhow. Buy a nice house or two, make sure they aren't stupid investments though. Go ahead and be an angel investor and fund some startups, but REFUSE to do it for anyone you know. (Friends and money, oil and water - Michael Corleone) Play. Have fun. You earned it by putting together the shoe sizes of your whole family on one ticket and winning the jackpot.
The majority of lottery winners were already bad with money and dream of lavish lifestyles. My financial goal would be to not have to worry about money - hence why I'd be giving away so much away to friends and family.
My dream home would "only" cost $2-3m and a large portion of the expense is making it as green and efficient as possible.
Nearly one third of multi-million dollar jackpot winners eventually declare bankruptcy. Some end up worse.
Sorry, but this isn't the cautionary tale you think it is. I think I can manage better than the bottom third, and even if I can't, it's worth the shot
Still some good advice, like where to find the lawyer you will need.
Ok, first of all, rich people don't pay taxes. If you paid taxes, you ain't rich. You're at best a parvenu upper middle class.
Secondly, the current best way to give them money freely is to become a major investor of a company, make your friend the CEO, pay them in stock options, push the company to focus on making profit at all costs to raise stock prices and then have both you and your friend pull out right before it all comes crumbling down.
Or so it seems to go in the US at least.
Set up a trust for friends and a trust for family for things like education, house, car, emergency expenses
Don't try to cheat the government. make sure you can say either you reported the large gift for tax purposes or the total is under 18k., if you must cheat you can take them on vecation and they use your gear for free but the plane ticket, meals and anything that could look like a gift is under the limit.
tax fraud is something the irs takes serously and you never know when they look. Plus you are not sympathetic to a jury so prison is likely for you.
if you give anyone more than 10k in a year (well under the limit) have your accountant deliver it all so there is plenty of evidence that you are not cheating. If you want to give over 18k have your accountant figure out how to do withholding so you friends don't have a tax surprise.
What about shared credit cards?
same thing, they are lakely to audit them and see if they are being used to cheat. You can use them but either count everything as a gift or have good records that whatever isn't a going to whoever.
- Create a company and hire them to "work" one hour a month for a big salary. If you put $25m in an account, the interest covers the salary. They get a steady bonus income with the added bonus of getting the best insurance available. Is that legal?
i think this describes at least a few production companies/celebrities like happy madison. those guys are just having fun and gettin paid
But they DO something and my theoretical company would do nothing.
I wouldn't want to work anymore so I'm not interested in actually running a company. I'd just "invest" in companies doing things I like. Quotes there because I wouldn't be looking for a financial return on that investment
Coincidentally, for no real reason I ponder this sort of stuff too! But I'm much more pessimistic about the outcomes haha.
The real answer to this stuff would be to find a financial advisor, I suspect setting up a trust and giving out x amount of money per year is the most sane approach.
re: your options
Give them a lump sum of $X million. They eat the taxes the first year and handle the savings themselves.
Keep in mind people tend to be terrible with money/finance. And also keep in mind you cannot force people to do what you think they should do with their money.
There will be a good percentage of people that will neglect any advice about keeping that $$ for taxes & such and will come back to you in a year asking for more $$ to cover the the taxes and expenses that they are facing - after all you were the one that put them in that position.
The other percentage of people will have remembered to keep some $$ to cover taxes but will likely still bankrupt themselves in the next few years - they too will come back to you asking for more $$ because, well none of that would have happened without you starting it all.
Hopefully you'll have a few people that didn't blow it all & maybe invested it, or at least paid off their bills and mortgages.
Create a company and hire them to “work” one hour a month for a big salary. If you put $25m in an account, the interest covers the salary. They get a steady bonus income with the added bonus of getting the best insurance available. Is that legal?
Not sure on the legality, I guess you're essentially creating some sort of shell company? Keep in mind both the company and the "employees" will be facing taxes. Those "employees" are going to end up in entirely new tax brackets depending how high you bumped their yearly incomes.
On the upside they would be paying way, way more into social security so at least they'll end up with a bit more coming back in their later years if social security still exists. And you could maybe do things like auto-enroll them into a 401k and invest that into retirement savings.. as long as each "employee" doesn't somehow screw that up since each 401k account is technically their own and you can't force your will on people to do things with their own money.
Set up a “shared” checking account they can use to pay for…whatever. But would these expenses count towards the gift tax? I do not know.
Not sure on that one but I suspect that's just another version of gift tax like you said. You'd better talk to a financial advisor.
Buy houses and let them live there rent-free. I don’t really like this one because I don’t want to be a lord to my friends and family.
The smart ones will immediately sell, even if they sell at a loss they'll make free money. The less smart ones will come back to you ever few years when something needs to be done with the house, it's very possible many of those people will be living in houses they can't actually afford to maintain and upkeep and you put them in that situation in the first place...
Yeah I kind of hate the lump sum option for that reason. I'm confident most of them would handle it fine but I'm POSITIVE that a few would blow it all in a year on dumb shit.
I think the company thing is the best option even if it bumps their tax bracket - they'd only pay the higher taxes on part of it and any deductions they might be getting by being in a lower bracket would be more than made up for.
As for the house thing, they couldn't sell - I'd own the house! But like I said, I don't want to be a landlord to my friends. The only type of landlording I'd do is build (GOOD QUALITY) homes and rent them to domestic abuse victims for pennies. My cousin is very involved in that sphere and I'd love to help them out - though I'd probably ask her to handle the landlord part of it (for a nice salary, of course)
The company plan is just a trust fund with extra tax / steps. Do one of those instead. Set it up so they get a weekly check if they're really bad with money and then call it a day.
I would think option 2 HAS TO be legal, except, you gotta modify it slightly. You don't claim they work one hour per month. You pay them a yearly salary. And their job is to "entertain you". Essentially you're just paying your friends to hang out, for an unspecified amount of time every year. Which in practical terms is just you giving your friends a paycheck for the sake of giving your friends a paycheck, and sometimes you hang out. I swear to god, this HAS TO BE the basis of Adam Sandlers whole career. He makes movies where he just happens to always hang out with his friends, and somehow other people enjoy the movies too. But mostly it's him hanging out with his friends.
Option 4 could work too. But here's what you do. You hire a landlord. You tell that landlord "Anything they want done, you're in charge of getting it done. ASAP. I don't want to hear one peep out of them not getting whatever fixed. That way, they think of the landlord as the landlord, and you as just that friend they have who happens to own the houses they live in rent free. But they don't think of you as having power over them. That's what the landlord manager is for.
You could also buy an old hotel, fix it up, and have it serve as a homeless person shelter. I mean, this doesn't have anything to do with your question, but if we're just throwing money around, why not?
I've wondered the same. I previously planned (if i won the big lottery) to set up a $1 million trust with the idea that my work department could take 4% per year to purchase equipment. I returned to work at the end of the summer this week to find that the idiots who are now in charge threw away over $10k worth of stuff that i (and a bunch of school kids) need. Those fuckers aren't getting shit now and i hope i win just so i can buy my whole team into retirement and leave the fuckers totally fucked!
Back to the topic - i wonder about setting up some type of grant program. Maybe, as you mentioned, paying things for them instead of giving cash? Do you pay tax when you get a home through habitat for humanity? Can i pay for someone else's health insurance or fill their hsa account? Maybe a scholarship for their kids? Most people i know would be pretty happy to have $18k each year dropped into their retirement accounts.
Did a little research. You want to be in one of the 9 states that doesn't tax in lottery winnings. Fed will take 24% immediately and you'll pay the remaining 13% when you file taxes. The $18k gift tax limit is to and from per person. If the giver and recipient are both married, each giver can give each recipient $18k, so $72k per year from one married couple to another. Still trying to figure out the trust situation.
Re:4:
Make them sign leases that they can terminate at any time, but you cannot. Set the rent at $1 a month. Duration 10 years.
Congrats, you have given away wealth without taxesThe courts will see right through that and make your friends pay taxes on what they consider reasonable rent. You just hope there is no audit.
Oh that'd be good! It would avoid them feeling like they have to be artificially nice to me.
My dream situation is to buy some land, split it into smaller plots, and let my friends design their perfect home (within reason). Most of us live pretty far from each other now.... I'd love to be within walking distance again
Tell your friends they can charge your credit card once a month for "escort service".
Depending on where they live, maybe they should open up a business in order to do it legally correct.
Statistically u will be broke or murdered so best off putting it all in monero and sending it to me. Trust me i can spend it better.
I would set up a trust that automatically paid them out periodically. I would start with a relatively low amount, to see if money turned any of them into assholes, and if not I would turn it up. but, don't tell them that's what you're doing. firstly it won't work if they know you're watching, secondly, using money to control your friend's behavior is weird, which is why I don't like the idea of making them work for it either. you didn't work for it
That seems a bit too secretive for me...both because I would immediately start building a nice house and like you implied, playing puppetmaster like that feels shady.
If the "making them work for it" was in relation to my 1-hour a month salaried position, let me be clear that they wouldn't actually have to do any work. It'd just be to have a number on paper.
you're not puppeting anything. you aren't controlling their behavior if they don't know that there is a reward. I just want to avoid creating any entitled monsters
I have no answer for this, but it reminded me of this old comment on Reddit.
Now this was interesting to read through. I guess that's what money does with us.
hand them cash
I say to hell with the older folks, the math doesn’t check out.
Gift the 18k to each new baby born in the family, have it invested into a large growth fund. Another option would be to have the baby on payroll and make sure ROTH is maxed out.
18k invested for 60 years with a compounding interest rate of roughly 12.4% goes a long way. That’s just a one time payment.
Everyone I'd be giving money to either is done having kids or doesn't plan on having more. So it'll be a full a decade or two before any new baby.
Plus, as much as I like the kids, they aren't my friends! I want my current friends to benefit. Why do you say the math doesn't check out?
You don't. You go off the grid. Live with that money.
Crypto
That's like buying more lottery tickets with it. You're unlikely to get lucky twice.
The question was how to give it to friends, not how to invest it
Definitely not
If you win the lottery and now have too much money, crypto is a way to lose a lot of money really freaking fast. If you put all your money into crypto, you're now broke!
You can always put the 90% of it into a stablecoin or pax gold and have it WO common crypto risk, and you can make privacy friendly transfers with it, a lot of people have loss money on crypto because they are ignorant.
I've never said to put all the money into crypto but definetly a 10% in high risk investment would be ok, you can still do a lot of stuff with the remaining 90%
Real estate it's a good option also for like 50% of it.