What the Mega Millions $640M jackpot winner should do next: Stay quiet, hire financial team

Someone at your New Year's party could be a newly minted mega millionaire, but you may not even know – if the winner's smart.

As exciting as it may be to win Friday's Mega Millions jackpot, now up to $640 million after there was no winner on Tuesday night, the winner ought to stay mum, experts say.

  After all, claiming that much money likely will also draw taxes, grifters, and friends and family members, prompting our first and most important piece of financial advice.

“Don’t shout your win from the rooftop,” Rob Burnette, financial and investment adviser at Outlook Financial Center in Troy, Ohio, said. “If you’re lucky enough to win the lottery, keep it quiet. Get organized and make a plan. Consider staying anonymous, if it’s a possibility.” 

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How much is the jackpot, when is the drawing, what are my chances of winning? 

The $640 million prize is for winners who choose the annuity option, paid annually over 30 years. Most winners opt for the cash option, which for Friday night's drawing is$328.3 million.

The single chance of matching all six numbers was roughly 1 in 303 million. Mega Millions tickets – which cost $2 each – are sold in 45 states plus the District of Columbia and the U.S. Virgin Islands.

Why shouldn’t you tell everyone? 

Scammers. 

“Some of those scammers have falsely identified themselves as being affiliated with Mega Millions,” Mega Millions said. “These scams all have one thing in common: They try to trick you into sending them money or personal information by claiming that you have won a large lottery prize.”  

No representative of Mega Millions would ever call, text, or email anyone about winning a prize, Mega Millions said. 

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Also remember, "no real lottery tells winners to put up their own money in order to collect a prize they have already won," it said. 

Steve Azoury, owner of Azoury Financial in Troy, Michigan, said he has advised many lottery winners, including a $181 million winner "who said ‘If I didn’t know you before, I don’t want to know you now.’”  

If you can’t tell everyone you won, what can, or should you do? 

“Get a tax attorney and a tax accountant right off the bat and then a financial adviser,” said Azoury. “They’ll work hand in hand to figure out the plan.” 

The plan will include which payout option to choose:  

• An annuity option makes an initial annual payment followed by 29 annual payments. Each payment is 5% larger than the previous one.  

• The cash option is a one-time, lump-sum payment equal to all the cash in the Mega Millions jackpot prize pool.  

The plan also should include a “fall guy,” Azoury said. “That’s the person or adviser who keeps you from giving loans to anybody, who tells people all the money’s tied up in investments, not available. We have nothing available to help you out and we’re not interested in your project.” 

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Should you take the lump sum or installment payments? 

That decision depends on your goals, your age, and what lottery rules are for beneficiaries to continue receiving payments, or if you’d likely squander a lump sum. 

Mark Steber, chief tax officer at Jackson Hewitt, recommends considering the following: 

• Size of the lottery winning: That can serve as a guide to determining taxes you may owe and the financial security you can derive from it. If the amount is on the smaller side, a lump sum may simply be easier. 

• Current and projected earnings: Consider your ability to earn money and tax rates over your lifetime. 

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How much do you bring home? 

That depends on how you decide to take your money and complex state laws.  

If you win the Mega Millions lottery, you’ll likely be propelled into the highest federal tax bracket. Your state of residency and where you bought the winning ticket can greatly impact what you pay in state taxes. 

For example, if you’re a California resident and purchase your ticket there, then you pay the 37% federal tax rate but are in luck because California doesn't tax lottery winnings, Steber said. 

New York, though, has the highest tax rate on lottery winnings.

But, if you’re a California resident on vacation in Rhode Island and decide to buy a ticket there, you’ll have to include your lottery winnings on your federal and California tax returns and file a nonresident Rhode Island tax return for your jackpot. You should claim a tax credit for the Rhode Island taxes on your California return so you won't be double-taxed on the same income in two states, he said.

“This is where a tax professional really comes in handy,” Steber said. “State taxes can be very tricky.”

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How long does it take to get your money if you win the Mega Millions?" 

Once you claim the prize, it shouldn’t take too long, Azoury said. “Maybe a couple of weeks,” he said. 

Remember, most people won’t claim their winnings right away because they'll take time to set their plan. Claim periods vary by jurisdiction so people should check with the lottery in the state where the ticket was purchased to get the applicable claim period for that ticket.

Mega Millions claim periods range from 90 days to one year from the draw date, the lottery said, but vary by jurisdiction. Winning ticket holders should check with the lottery in the state where the ticket was purchased to get the applicable claim period for that ticket.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday morning.    

This article originally appeared on USA TODAY: Mega Millions winner: Here's what we'd do if we won $640M