Whether you have just won the lottery or you are receiving an annuity that pays out over 20 or more years, Prosperity Partners, Inc. is your solution to meeting your financial goals. We treat every client individually and will customize a payout for your lottery annuity that best suits your needs and objectives. We will convert only the winnings that are necessary to help you meet your financial goals. Our clients commonly prefer to keep some lottery annuity payments to count on in the future. Prosperity Partners, Inc. has the capacity to structure your lottery winnings with unmatched personal attention and care.
The Lottery Winnings Process
With at least 40 states operating a lottery, many states differ in terms of the process and timing of payment. In many states, a lottery winner is offered a payout of the lottery prize over a period of time, rather than a lump sum payment. A deferred payment generally involves the payment of a prize over as much as a 30-year period with installments received on an annual basis.
Generally, a state’s lottery obligation to pay our over time is funded by the Lottery at the time of the initial prize award through its purchase of treasury securities that correlate to the maturity dates of the installment payments due the winner. In other cases, the Lottery may purchase annuities or guaranteed investment contracts issued by insurers of highly rated, nationally recognized rating agencies such as AM Best Company, Fitch Investors Services, Moody’s Investors Services, or Standard and Poor’s Corporation. Presently, most states offer a cash option to the winner versus the traditional annuitized prize.
However, there are scratch-off games that do not offer the cash option, thus providing more annuitized winners. For older lottery winners or those with near-term investment plans or other pressing needs, waiting decades for a payout can be incredibly frustrating. These winners are the sellers in the secondary market of lottery receivables.
Maximizing Time Value of Money Lottery
In simplest terms, the theory of Time Value of Money states that when all things are equal, money in hand today is worth more than the same amount of money in the future—say in a year from now. For you, this means that it is better for you to have your money now rather than have to wait for it. That way you can use it to make purchases or to invest at a rate of return. But, if you are collecting lottery payments over time you probably chose that option because you would get more money in the end; it’s already invested.
If you do not currently have your money in hand, then the annuity purchased by your state’s lottery commission does. In order to spend your money you have to borrow money from someone else (at their discretion to boot). Any time you borrow money it is at a cost to you; it costs you fees and interest. That cost will continue on for years until the debt is repaid. The cost of living is always increasing, and the value of the dollar over time depreciates; you can have more buying power today with a smaller amount of money than you will tomorrow with a larger sum. You can do more with less today than you can with more tomorrow. This, too, factors into the true time-value of your money.
Prosperity Partners, Inc. will buy your future lottery payments and pay you in one large lump sum payment, putting you in a position to really enjoy the full value that your winnings hold for you personally.
What is the standard procedure for purchasing lottery transactions?
Once a customer has verbally accepted our offer to purchase, we will begin our 56-point inspection process to complete the transaction. The Lottery process includes, but is not limited to, the following steps:
- Disclosure and Sale and Assignment Agreement documentation
- Due diligence to obtain underwriting documentation
- Court Pleadings Filed
- Court Date and Approval
- Lottery Commission Acknowledgement
- Final Audit
Contact a Prosperity Partners, Inc. representative for a no hassle cost analysis of your lottery or prize winning payments. We will review your payment schedule and assist you to determine the most cost effective means of turning your future payments into the money you need or want now.