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You'll need help with all that cash


You've poured a lot of mental sweat into choosing your Big Game lottery number: a combination of your dog's birthday, the address of your childhood home and your real age and not the one you tell others.

That's the easy part. If you win, you're in for a whole new numbers game. How do you handle $325 million?

And it may be more. Ticket sales continue until 15 minutes before tonight's 11 p.m. drawing .

So, let's say, you won. Now what?

No matter whether you chose cash or annual payments over 26 years, you've won enough that you need expert help. Financial professionals suggest talking to a lawyer, accountant or a financial adviser before collecting your winnings to develop a strategy.

If you opted for cash on the $325 million jackpot, you will receive a lump sum of $109.8 million after state and federal taxes, according to lottery officials. With an annual payment, you'll receive $8.5 million after taxes for 26 years.

The answers to managing such a huge sum aren't easy. Financial experts recommend parking the money in a money market account or certificate of deposit while you decide what to do.

Michael Hodes, an estate and trust attorney in Towson, suggests putting the money initially in a revocable trust. You'll still have control of the money and can name a trustee to manage the funds if you become incapacitated, he said. This way, too, when the hordes descend looking for a handout, you can say "Sorry, the money is tied up in a trust."

"These people will be deluged with everyone in the world seeking money from them," said Hodes, who has represented about a dozen lottery winners. "They can more or less blame it on the lawyer."

While the money is parked for safekeeping, you need to think about your goals. Do you want to give to charity? Do you want to make life as easy as possible for your children?

Your investment options are many.

But with such a huge amount, you can invest in conservative government bonds and still show a nice return, said Paul Shea, a financial adviser with Morgan Stanley Dean Witter in Baltimore. "With that type of portfolio, you're talking so much money that the income thrown off would be staggering," he said.

Some winners might just want to buy high-quality bonds with staggered maturities and not worry about their investments, he said.

Scott Walker, a financial adviser with Alexander Financial Associates in Virginia, recommended individual growth stocks, where you control capital-gains taxes. Another option, he said, are tax-efficient mutual funds that keep turnover and capital gains low or sell losing stocks to offset gains on winners.

With more money than you may spend in a lifetime, you will need the help of an estate expert to help you avoid federal estate taxes, which can be up to 55 percent.

Follow Jacqueline Onassis' example and create a charitable lead trust, Hodes advised. With this type of trust, a certain amount of the money, say, one-third, is put in the trust at your death and, during your children's lifetime, the income from the money goes to charity. When your children die, the assets go to the grandchildren.

With this, your family avoids being taxed at your death on the inheritance and taxed again when your children die, Hodes said.

The money that doesn't go into the charitable lead trust can then be put into a family limited partnership, Hodes said. You would have control of the funds but could start giving to children and other heirs by giving them fractional interests in the partnership's investment portfolio, he said. This allows you to maximize certain gift-giving techniques, he said.

Also, consider establishing a charitable foundation. You get some tax benefits upfront and the money put into the foundation is not included in your estate. On top of that, the family can control the foundation's donations.

By establishing charitable giving early, a winner can prepare a younger generation on how to be good citizens when they inherit a fortune, Hodes said.

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