Lottery Lawyer Fees: What's the Cost of Winning a Jackpot?
Winning the lottery takes luck—and safeguarding that fortune takes some serious planning. Hiring the right lawyers and financial planners can ensure you properly save, invest, and pass on your legacy. However, these services can cost a pretty penny for lottery winners with complex estates.
Lawyers are among the more expensive professionals you’ll need to hire if you come into a large amount of cash. This article explains how lawyers charge for their services, which legal services you’ll need, and how much you can expect to pay in lottery lawyer fees.
HOW LAWYERS CHARGE THEIR CLIENTS
Many lawyers charge a flat fee for standard services, such as preparing a simple will or a power of attorney for property. For straightforward services, lawyers consider a client’s financial status, his or her family’s needs, and other factors to decide what services are needed and to put a price tag on the work.
However, a sudden windfall of cash, such as a large inheritance or lottery win, requires a more complex management plan and a custom set of services that take longer to perform. In these cases, lawyers charge an hourly fee. The most basic lawyer might charge as little as $60 per hour, but it’s much more common for attorneys to charge $150 to $200 per hour for standard services. Experienced lawyers can charge as much as $250 to $350 per hour for complex estate plans. Lawyers in metropolitan areas tend to charge more per hour than those who work in less populated and rural areas. You can expect a high-profile lottery lawyer like Jason Kurland, who is widely known as the “The Lottery Lawyer” and has been featured on major news publications such as CBS, CNN, and Fox, to charge on the higher side of these fees.
To ensure all their legal needs are covered, some lottery winners hire a team that includes a few lawyers with different specializations. Working out a solid management plan for a lottery fortune will take several hours per month in the first year after the win, often in conjunction with a financial planner.
As a result, the first year will be the most expensive for lottery legal fees. In the following years, your lawyers may make adjustments to your documentation and management plan as needed.
The following is a breakdown of the costs involved in creating a good financial management plan for your lottery windfall.
1. HIRING A TAX ATTORNEY
If you win the lottery in the US, the very first decision you’ll need to make is how to collect your winnings. Will you take a lump sum or yearly instalments spread out over several decades? Both options come with different tax implications that affect the amount of money you will receive in the end.
In order to make the right decisions, you’ll need to hire a tax attorney who is well-versed in federal and state tax laws surrounding major financial windfalls like lottery jackpots and inheritances. Minimizing the amount of taxation on your prize is essential to shielding your fortune from the IRS.
Cost to hire a tax lawyer: $60 to $300 and up per hour, depending on complexity
2. CREATING A LOTTERY TRUST
Most financial experts recommend setting up a lottery trust with a lawyer before you even think about collecting your winnings. Maintaining anonymity after winning the lottery is a major concern and is the primary way to protect yourself and your money.
While most US states do not allow winners to remain anonymous, several states do allow winners to send a lawyer to collect the winnings in the name of the trust—thus protecting the winners’ identities. In the rest of the world, lottery winners have an easier time remaining anonymous—in China it’s even commonplace for winners to claim their prizes while wearing costumes.
An estate planning lawyer can ensure that your lottery trust clearly states how you will access, spend, donate, and save your money. In the case of multiple winners, especially in states that only allow a single payee per winning ticket, a lottery trust can clarify how the money should be divided and avoid any disagreements. Finally, a trust can also give basic directions for what should happen to your fortune if you pass away unexpectedly.
Cost to create a lottery trust: $5,000 to $10,000
3. PLANNING YOUR ESTATE
Wealthy people have complex assets that need serious planning for the future. An estate planning lawyer can ensure a smooth transition of wealth and minimize legal and tax costs for your heirs.
For example, as of 2018, an individual can leave up to $5.6 million to his or her heirs without paying a US federal estate or gift tax, while a married couple can shield $11.2 million from these taxes. Through clever financial and legal arrangements, lawyers can help you and your family avoid unnecessary taxation for any money and property worth more than these amounts. These savings could easily cover the costs of hiring a lawyer in the first place and likely leave you with plenty of money left over.
Your lawyer can also clarify important estate planning details, such as preparing a final will; preparing a living will that identifies who can handle your affairs if you are unable to do so; and a medical directive specifying who is allowed to make decisions on continuing or stopping life support.
Cost for an estate plan: $5,000 to $10,000 for a simple plan; $50,000 and up for a complex plan
4. FIGHTING LAWSUITS
Despite their best efforts, lottery winners are frequently targeted by scammers who are after their money. Hopefully, you’ve followed lottery experts’ advice to remain anonymous, which should reduce the target on your back.
However, when a frivolous lawsuit rears its head, you’ll need a lawyer to protect you. Your lawyer can defend you in court and anticipate additional vulnerabilities that may put you at risk for other legal trouble.
Cost to fight a lottery lawsuit: $100 and up per hour
Whatever legal services you contract, always get the details in writing. This will clarify your lawyer’s fees and payment terms, exactly what services will be provided, confidentiality requirements, and details about conflict resolution. Lottery winners are likely rack up a pile of legal fees when they become multimillionaires, but the cost of making a proper financial and legal management plan is well worth it to protect your assets now and in the future.