All right, maybe you avoided it at $900 million, but now you just can’t resist the temptation to buy into your office pool for the estimated $1.4 billion Powerball jackpot.
So what do you need to know before you invest your $2?
The NYS Lottery says your office pool should have a group leader who’s responsible for collecting and accounting money from the group and that person or another person should keep a list of all of the participants.
If for some reason, a normal office pool participant opts out, that’s important to note. And all of the participants should agree on who’s buying the tickets, as well as where and when.
Whoever does end up buying the tickets could be holding more than a billion dollars in their hand, so that person should provide the entire group with a copy prior to the time of the drawing so everyone is aware of the winning numbers.
And you may want to consider limiting the number of participants in the pool to 10. With 10 people, the NYS Lottery can issue individual checks. But after that, it gets trickier.
If you do have more than 11 people in your group, here are your options:
- Consider forming a Limited Liability Corporation (LLC) and listing each person in the group as a member. The Lottery will pay the prize to the LLC under the LLC’s tax ID number. The group leader would be responsible for making the disbursement to each LLC member.
- Consider forming a Trust and listing each member as a beneficiary. In this scenario, the Lottery would make the prize directly available to the Trust utilizing the Trust’s tax identification number. The Trust would then make the disbursements to the group.
- Groups also have the option of electing up to 10 individuals within the group to receive the prize, making those individuals 100 percent responsible for all tax implications associated with the prize. They would also be responsible for disbursing all funds to the rest of the group.
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