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How do you avoid being robbed of a lottery prize, especially if you are undocumented?

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Entrusting others to collect a juicy prize, even if they are your relatives, may not be a good idea. Here’s what to do if luck smiles on you and you win the jackpot.

1. MAKE COPIES OF YOUR TICKET

It could be a million-dollar prize or a scratch-off of thousands. Even so, the most important thing is to make photocopies of both sides and keep the actual document in an extremely safe place. The copies will serve as evidence that you are in possession of the winning ticket and you can show them to your accountant, lawyer or financial expert for advice.

2. FIND OUT THE LOTTERY RULES BEFORE SIGNING THE WINNING TICKET.

It is recommended that you ask your accountant, lawyer or financial advisor to find out in detail all the Lottery rules and the contract before you sign the original ticket, because, in some cases, signing your signature could prevent you from establishing a blind trust in the future.

A blind trust is a contract under which the owner of an asset transfers ownership of the asset to a third party to manage for the benefit of whomever the original owner has instructed.

It is a way of planning the estate of the lucky winner during his or her lifetime, in order to prevent his or her death from forcing the heirs to receive those assets by succession, which can lead to a conflict of interest.

The blind trust also allows you to receive the money anonymously, thus keeping your name out of the spotlight, and thus safe from fraudsters.

See also: What kind of trust is best for lottery winnings?

3. DON’T BE IN A HURRY TO COLLECT

Undoubtedly, winning the jackpot would lead more than one to try to collect it as soon as possible, but the Lottery establishes a fairly long period of time to claim the money. It is advisable to take a deep breath and then seek financial advice to avoid unexpected situations, such as the theft of that large sum.

4. PROTECT YOUR PRIVACY

It would be understandable to present yourself as a nouveau riche and celebrate the jackpot in style, but such hullabaloo could attract fraudsters. While some states allow the money to be collected anonymously, others will require the winner to make his or her name public and hold press conferences. If that’s the case, it’s best to change your phone number and arrange for a post office box with the USPS to avoid unwanted solicitations.

5. MAKE A FINANCIAL PLAN

It’s not hard to find devastating stories of lottery winners who ended up broke after squandering their fortune. Before you start planning, it’s best to map out a financial plan that allows you to manage your funds wisely.

6. DECIDE HOW TO COLLECT THE PRIZE: LUMP SUM OR INSTALLMENTS

The federal and state governments will levy taxes, so you’ll need to decide how to collect it. If you choose to claim the lump sum, you will receive about 60% of the total value after federal and state taxes. Or, you can choose an annual payment over a period of time.

Undocumented immigrants, being considered foreigners, would have to pay higher taxes.

7. DISTRIBUTE YOUR MONEY IN DIFFERENT ACCOUNTS AND BANKS

Show up at the teller window with a check for millions? Not at all. It will be necessary for your attorney, accountant or financial advisor to speak with the bank’s senior management or private banking department to discuss the best options for holding a large sum. Laws mandate that individual bank accounts up to $250,000 be insured, so one possibility would be to spread the money across multiple accounts and banks. “Don’t put all your eggs in one basket” is a popular saying that illustrates that strategy.

CAN AN UNDOCUMENTED IMMIGRANT COLLECT A LOTTERY PRIZE?

In February 2011, an undocumented immigrant bought a $10 lottery ticket at a small store in the town of Spring Valley in Rockland County in upstate New York. To his surprise he was a $3 million winner, but the good fortune ended up turning into an ordeal.

The immigrant, who spoke limited English, informed a store clerk that he had won a fortune, but, according to the Attorney General’s Office, the worker hatched a plan with the store owner and a third man to intimidate the winner. The trio said he would be deported if he tried to claim the winnings.

The three persuaded him that they would arrange for him to get some of the money if he handed over the ticket, but months went by without him receiving a single cent. He filed a complaint with the Attorney General’s Office, which led to an investigation and the arrest of the three men on charges of fraud and grand theft.

While each state sets its own lottery rules, an undocumented immigrant can claim a prize regardless of status. Anyone can claim a prize from a U.S.-based lottery as long as they purchased the ticket in the United States.

Non-citizen lottery winners must follow not only federal law, but also the law of the state in which they purchased the winning ticket and pay a 30% federal tax and any state tax, which varies from state to state.

In addition, the winner may be required to pay taxes from their own country of citizenship on lottery prize winnings and may be subject to tax treaties in effect between the United States and their country of citizenship.

Any amount won under $600 can be claimed at the place where the ticket was purchased. Any amount in excess of that figure must be claimed at the Lottery Commission headquarters of the state in question.

Most prizes under $600 do not require any identification to claim, depending on the state. It is generally sufficient to sign the back of the ticket and hand it to a lottery retailer or mail it to the appropriate Lottery Commission to receive a check. For most prizes over $600, you may be required to show a government-approved form of photo identification, such as a passport, driver’s license or state identification card, as well as a Social Security card.

The age requirement for claiming an award also depends on the state. Not all states require the minimum age to play at 18. For example, Arizona and Iowa require lottery players to be no younger than 21 to purchase tickets, while Nebraska requires lottery players to be no younger than 19 to purchase tickets. Of course, if a resident travels to another state where the legal playing age is 18, he or she could win and claim the prize.

There is a 1 in 175 million chance of winning the PowerBall lottery with a single ticket, and if you are the lucky winner regardless of your immigration status, the first thing you must do is sign the back of the ticket to prevent others from claiming the prize.

DOES WINNING THE JACKPOT OFFER A PATHWAY TO LEGAL STATUS?

While an undocumented immigrant can collect lottery winnings, suddenly acquiring a wealthy bank account does not mean getting the keys to open the door to legal status.

Being wealthy does not guarantee a green card. Unless the winner meets the criteria for a permanent residency interview, he or she will have a difficult path to legal status.

The law provides for permanent residency for investors under the EB-5 program. The applicant must invest $1 million in a business that creates at least 10 jobs for U.S. citizens or permanent residents. The minimum is $500,000 if the investment is an area with an unemployment rate of at least 150% of the national average or a rural area with a population of less than 20,000.

However, for most undocumented immigrant investors, the dreaded “unlawful presence” residency ban would prevent them from obtaining a green card. Unless the investor qualifies for a U.S. interview for permanent residency, he or she would have to return to his or her home country for an immigrant visa interview. Then, the applicant could face a three- or 10-year barrier to obtaining the visa. That is the penalty for applicants who leave after being in the country undocumented for more than 180 days.

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