WHY LOTTERY WINNERS CAN LOSE FORTUNES

It could be a very unlucky time to be the lucky winner of Wednesday’s $425 million Powerball jackpot. Whether Congress and the White House reach an agreement on deficit reduction by the end of the year or not, new taxes on the rich are bound to take a large chunk of the prize money.
Financial advisors usually recommend lottery winners spread their winnings out over several years to avoid temptations of spending the money too quickly. But with the fiscal cliff threatening to shrink the prize money through a bundle of new tax hikes, advisors are recommending the winner takes the lump sum as soon as possible. “A lump sum could save you millions in taxes,” Matthew Goff, a financial adviser in Houston, told Marketwatch.

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