Lottery winner asking a judge to let her keep the cash and remain anonymous
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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.
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 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.
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.
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?
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.
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.
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.
Equitable relief is precedent-setting, and derives from the basis of "whoa, our rules feel 'off', lets give this person a break".
If you want the precedent to be narrowly used, you just write a ruling that makes it clear that the outcome is exceptionally fact specific.
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.
Real life also has preferences and bias. 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.
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?
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.
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.
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.
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.
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.
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.
Are you siding with the state on this merely because it's a state? Would you feel the same way if it were microsoft?
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.
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.
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 also ignoring the time value of money 100 million to day is worth more than 10 million for 10 years
[0] http://money.cnn.com/2017/06/27/news/illinois-lottery-state-...
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.
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.
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.
My dad grew up in the Great Depression. He used to say "The best way to double your money is fold it in half and stick it in your pocket."
"The state allows people to form an anonymous trust, NewHampshire.com reported, but it’s a moot point for the woman — she signed her name on the back of the ticket shortly after winning, and altering the signature would nullify the ticket."
Oh and an excellent tidbit out of the story is that the attorney representing her actually blogged about the winner having been in NH and how the winner should not sign the back of the ticket. Apparently the ticket winner is now using that attorney to represent her in the courts. https://www.shaheengordon.com/New-Hampshire-Legal-Blog/2018/...
Looks like some lucky person was smart enough to do that.
"In 2016, the last winner of the Powerball followed that advice. The $487 million prize claimed through the Robin Egg 2016 Nominee Trust, which was created by Shaheen, and he serves as its trustee."
Signing the back upon purchase is a strong defense against this fraud. So it's not as black-and-white as it seems.
Additionally there is a self scan kiosk where you can check your ticket. And there's always publicly listed winning numbers.
Most lottery systems around the world will buzz a "winner" or "not a winner" sound and some flashy lights when you bring the ticket to a clerk. Try it in Germany, England and USA (places where I played lotto and witnessed it firsthand)
http://wfla.com/2017/12/12/gulfport-and-st-pete-store-clerks...
(and yes, a lot of systems now have self-service terminals that one can use to check your own ticket, and cashier terminals that make audio, but fraud will always find a way.)
Even an online article?
Were you looking for a paper copy? I don't have your mailing address.
But doesn't this mean if someone can assault you and steal the ticket they can claim it themselves? Sounds like both have risks :/
But, why? Because she accidentally signed the ticket before realizing that it invalidated that option? She holds the winning ticket, just let her redact her signature from it legitimately and claim her winnings.
It sucks for this woman, but technically she could always forgo the winnings altogether. Nobody is forcing her to take the money, or to keep it. She wants to have her cake and eat it too. What's she's asking is reasonable on its face, but there are larger considerations at play.
The legislature is still free to address this woman's concerns directly, as well as for future winners. Ideally that's what would really happen. Maybe she should pledge some donations to her friendly neighborhood representatives.
But that’s shouldn’t be the question. The question should be whether that law is extremely dumb (obviously it is), and whether it threatens to place undeserved stress on an individual going through a major life event (it does).
On the other hand, I understand why lotteries want to publicize winners in their marketing.
A fair deal might be, that the publicity value is defined to be X% (say 10%) of the prize, and you can take the full prize with publicity, or the prize - X% anonymously.
The whole thing places lottery winners into a dangerous situation, and everyone knows it. That's why the stereotypical "change your name and move" advice is so often recited.
It is ludicrous that it would take a judge more than a few hours to review the law and make a decision to allow her to change the ticket to an anonymous trust.
https://www.nbcnews.com/news/us-news/programmer-pleads-guilt...
https://en.wikipedia.org/wiki/McDonald%27s_Monopoly#Fraud
>In 2000, the U.S. promotion was halted after fraud was uncovered. A subcontracting company called Simon Marketing (a then-subsidiary of Cyrk), which had been hired by McDonald's to organize and promote the game, failed to recognize a flaw in its procedures. Chief of security Jerome P. Jacobson[3] was able to remove the most expensive game pieces, which he then passed to associates who would redeem them and share the proceeds. The associates won almost all of the top prizes between 1995 and 2000, including McDonald's giveaways that did not have the Monopoly theme. The associates netted over $24 million.
It can also prevent a spouse or common law partner from winning the lottery in secret and taking off with all the money. It's happened more than once in Ontario, Canada, with one story making the rounds right now.[1]
[1] https://www.thestar.com/news/queenspark/2018/02/06/woman-sue...
It's OK to stay anonymous, particularly in the largest lotteries (National Lottery and Euromillions, both operated in the UK by Camelot Plc), and you can not be publicly named without opting into it.
It's my understanding that every person who gets a prize over £500k on the national/euro lotteries gets a visit from a Camelot employee to ensure they're prepared to handle the money and are speaking to suitable people who are not going to destroy their good fortune.
I don't see why other lotteries in other countries can't do the same without the risk of fraud increasing.
They say that they have to be open (makes sense) but they also allow you to claim via an anonymous trust, but she can't do that because she signed it. Feels like they could privately identify her to make sure she's the name on the ticket and then do the public part via a trust.
This might not fit the way the relevant laws are written, but they can't say that they're fighting in the interest of openness by not allowing this but allowing the anonymous trust in the first place.
They don't want to be involved in that, but they're willing to use an externally valid mechanism, which they can't influence.
Personally, there was a way to stay anonymous, and she goofed it up. No sense in changing the system for someone who can't help themselves.
The lottery commission shouldn't be allowed to hide results.
That is to say: don't pretend to be some white knight for principles when you're actually just trying to CYA. Be honest.
However, we're not expecting people to deploy Kelly criterion here, nobody is playing lotto for EV and a need to maximise returns on known value parameters.
But I play lotto. And I know all this more than most. I have literally paid my rent with money earned from understanding this and exploiting it. WTF am I doing playing poor odd games?
When you're playing $5k to win $5k on something where you think true odds are more like 55% in your favour, you are doing so most likely knowing $5k is 10% of your total bank (based on Kelly), and that you're 45% likely to lose. You're going to hopefully play over and over again and in the long run make money.
When you're playing $2 to win $100m, do you actually care?
The $2 is likely such a tiny part of your bank that you could literally lose it down the back of the sofa and not care, but the payout is so large and life-changing, that not having access to that very remote possibility - given the cost is so tiny and marginal and unnoticeable - is short-sighted.
Yes, the maths don't work from a probability angle, but arguing that playing the lottery is a tax on ignorance is juvenile and short-sighted. Optimising your bank at that level is like trying to make sure you don't leave a single grain of rice on your plate at dinner.
The maths of starting a business are pretty harsh, the costs of failure are higher and yet still, many people choose to do it. Are they fools? Perhaps. But they consider the cost and potential payouts to be worth it.
See the bigger picture from time to time.
and when it isn't a tiny part?
> Optimising your bank at that level is like trying to make sure you don't leave a single grain of rice on your plate at dinner.
many individuals playing the lottery are in a position like that, and frequently spend significantly more than $2 in hopes of winning.
> See the bigger picture from time to time.
...seriously? nobody cares if people like you or me burn a few dollars on a month on a lottery. the concern is for folks not in a position to do so.
I do find it problematic that states lean on a gambling game for revenue that (due to the population distribution of typical lottery players) acts as a defacto regressive tax. There's a side of me thinks this is rather exploitative, particularly with the evidence that lottery advertising is strongest in poor neighborhoods. (https://www.wsj.com/articles/powerbull-the-lottery-loves-pov...)
With the recent emphasis in America of pooling together multiple states and tweaking odds to produce these headline-grabbing 9 figure jackpots, one other complaint: it's pretty clear to me that American lotteries fail to prepare winners for the "consequence" of winning... that is, the huge amount of financial planning and protection (even lifestyle and location changes, I'd say, along with how to handle relationships with people you know), that is necessary for having a public-known 9 figure asset base. Even lotteries that reward 6 or 7 figures may come with some shocks, but leaping to that sort of base is a whole other sort of ball game.
i feel like that's pretty bad, next to an article like:
https://www.fool.com/investing/2017/10/01/why-half-of-americ...
Each lottery ticket purchased is a no-skill crapshoot. People who are attracted to it tend to be looking for short cuts in life, not rolling up their sleeves for the hard and uncomfortable work of entrepreneurship. And unlike a startup, the lotto confers no personal benefits along the journey even when it fails.
These traits 1) help soften the downside of "losing" the "startup lottery" (making it non-analogous to the actual lottery in pure mathematical terms). And 2) perhaps also might help explain any measured difference in outcomes between startup founders and lottery winners.
But the "People who are attracted to it..." portion of your post doesn't seem necessarily true and is a pretty harsh/puritan attitude. Do you have any hard empirical data supporting these claims?
Defore testing this claim, and for your own sake, we should investigate parent's original question: do we see a similar pattern with startup "winners"? Because if so, your reasoning here might have disturbing entailments for the entrepreneurial set ;-)
Any UK winner can opt for anonymity when collecting their prize. The National Lottery give financial and legal advice regardless of your choice. Only around 20% opt for publicity.
For example, family members of giveaway administrators are generally prohibited from winning, but how are you supposed to know who they are?
https://www.google.com/search?q=%E5%BD%A9%E7%A5%A8%E9%A2%86%...
Being able to take half a billion dollars of free money anonymously and safely is hardly a right. I mean, you could simply not take it.
Seems fair to me. Am I missing something?
Why would fraud be inevitable if you were allowed to form an anonymous trust before claiming your winnings? You still have to produce the winning ticket. What new vector for fraud does this open up? If the people running the lottery are corrupt, it wouldn't seem they need to use anonymous trusts to siphon off money.
Ultimately, state sponsored lotteries like this are a bad thing for everyone: the winners, the losers, the taxpayers, the government, and society at large. So if she can win this case and that in turn makes lotteries less popular or uneconomical, then that's a good thing for the culture.
What would it mean for the lottery to funnel money specifically into schools?
Don't worry, the schools are getting their money.
You have seen The Running Man, right?
Rules rarely apply to rich people.
bachmeier is pointing out that you could accomplish this equally well by making up a name and publishing it as the lottery winner. The fact that somebody signed a ticket has no bearing on that.
Even looking at it now, while I can see that interpretation, it doesn't come easily to mind.
Thanks for pointing that out!
This is such a loaded statement, in multiple ways, that I don't know where to start.
It seems like this individual is doing a tremendous public service by taking this to court. I think most of us would balk at the risk of somehow losing the millions of dollars.
How does releasing someone's name and location even avoid fraud within itself? It only works if people invade that individual's privacy (e.g. job, associations, etc).
Or do we now need an IQ test before certain types of activities can be enjoyed?
What's free about it? They will advertise the win one way or another, just in this instance using a verifiable name of an individual.
That might make the advertising more believable or relatable and effective but doesn't make it 'free'.
And, on top of that, the stress of simply managing that amount of money so you don't end up as another "they blew it all" story about lottery winners.
That said: I wish I had her problem.
Most people probably would say the same. However, for a half-billion dollars I'd just assume that managing both the money and the people you have to interact with was my new job.
And, at some point...things would have to improve. You change your phone number. You change your address. You identify the moochers and the honest friends. You've hired a lawyer and a financial planner. And, on top of all that, you know that you and your loved ones won't want for food, shelter or health care. Ever. And that you can use some of your fortune to make a positive impact on your community, as you see fit.
I hope she wins her case, but if she doesn't...I'd still trade places with her in a hot minute.
Somebody remember this .. Improbably Frequent Lottery Winners https://news.ycombinator.com/item?id=15262440
This is the same reason why arrest records are public everywhere in the US: secret arrests are dangerous.
Of course this default-public provides opportunity for other kinds of abuse as well, but, at least in the lottery case, it's by definition opt in.
See also https://www.legalmatch.com/law-library/article/filing-a-laws... or use your search engine of choice for '"anonymous plaintiff" lawsuit'.
This prevents the operator from simply saying someone has won and never paying out. In theory, you could go around to everyone on the list and ask them if they won a lottery prize. If anyone denies it, the operator might be pocketing prize money.
It is clear from the available evidence that publishing the amount that someone has won does harm to the winners. It becomes feedstock for a "people to rob or defraud" list. The same principle is applied to the secret ballot, wherein anyone can find out if you voted in an election or not, but they cannot know whom you voted for unless you tell them yourself. You can, of course, lie to them if you desire.
Q: Ma'am, did you win the lottery this week?
A: Yes. My name is on the list, isn't it?
Q: How much did you win?
A: A dollar.
Q: You didn't win the jackpot?
That's a new car, isn't it?
A: Of course not.
I got a good deal on the financing, that's all.
Q: And the 12-foot bronze statue of
David Hasselhoff's Baywatch character?
A: I found it at a dump.
Q: Clearly, you also hired Peter Dinklage
to dress up as Tyrion for your birthday party.
A: That's just an enthusiastic cosplayer.
Or maybe just hire an accountant/lawyer to cash the ticket and transfer the funds to her account? I mean she's got the money now.
Everyone actually wants to win. But not necessarily life changing amounts of money of this magnitude. We should go back to more small wins and smaller jackpots.
These tickets are also usually distributed sequentially, not randomly, so you end up with cases like a single village this December in which 50 winning tickets (=200M€) were sold to hundreds of persons (as tenths).
Of course, it must be painful to live in the area and not have bought a ticket...
On one side, you can see why the lady was asking for anonymity - exposing her could really endanger her life. She would be a target for anyone, who would want a piece of that $500 million dollars of reason. On the other side, you see that the state wants to advertise and use this as a marketing ploy to entice other people to play.
But there's a snag! Nathan's lawyer lets him know he has to legally announce the name change in a circulated newspaper. This might draw attention to his scheme, right? So in order to get around that, he creates a fake newspaper, and circulates it around a handful of major cities for four weeks to make the name change announcement.
Here in France you have the choice (the lottery is not even encouraging you that much to go public).
FYI, when politicians say they donated XYZ to their personal foundation or trust, this is many times what has happened.
In fact, people who donate large sums to University and other charitable causes do just that, receiving payments in return.
Citation needed. What you have described is not a donation, and would indeed be a violation of the University's fiduciary responsibility with respect to donations. The consequence is generally that the University would lose its non-profit exemption. Most likely, you are conflating a contribution to a family trust with a contribution to a charitable trust. Transfers to a family trust can be revoked, and the trust can pay money back to its grantors or trustees because it's not a charitable organization and does not have a charitable purpose. A grant to a charitable trust is irrevocable, and cannot go back to the donor.
Here is a page at the University of Chicago that describes how that university implements charitable gift annuities.
https://campaign.uchicago.edu/join-the-campaign/giving/plann...
Really? They have exactly the results I described. In what way do they differ from what I wrote?
Charitable Gift Annuities are not theoretical, despite you having gone from protestations that Universities would go out of business for engaging in them, to now saying that I wrote things I didn't.
P.S. A deferred annuity for a lottery is an entirely different product from a charitable gift annuity.
- Public + full money
- Anonymous + half money
Win-win for both parties.
Her problem is not unique; any wealthy celebrity has had to deal with the same after all.
I would attempt and wear a costume or mask to the announcement event if I won.
Transactions done only in the cryptocurrency have no such disadvantages, at all. Those are all issues with conversion to and from fiat, and thus arguments against fiat.
At some point, maybe not with Bitcoin, maybe not with Ether, but at some point, there will be a tipping point. Probably with the next country whose fiat fails (venezuela?)
Here's the thing, i want to be able to pay bills and be relatively insured against losing to a con man.
Currency must be boring, reliable, trustworthy. Examples of the Wiemar Republic Mark, Zimbabwe Dollar and other examples of hyper-inflation are reasons why it must be consistent. Not 10,000 one day and 8,000 the next. That's gambling.
Right now CC is a non-starter as i can't get my daily needs met using it. It's a pyramid scheme full of shysters and people trying to get rich quick.
How do you vet that an exchange won't pull something ?
I want a boring finances. Yes there are issues with fiat but i can go, put a dollar in, come back and still have a dollar. Not 0 and some excuse "hacked!".
Even with watermarks, etc., the cost to manufacture an exact replica ticket couldn't be more than a few thousand dollars. Even if it were $100K to buy some specialized equipment, it would still seem like a worthwhile investment.