Should I Incorporate If I Win the Lottery?

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After winning the lottery, what's next?
After winning the lottery, what's next? (Image: holding winning lottery image by drx from Fotolia.com)

Incorporation is not Necessary

A person does not need to incorporate as a business entity after winning the lottery unless he plans to invest in real estate. He should take care, however, to seek legal, tax and financial advice, advises Michael Garrison of Garrison Asset Management in West Chatham, Mass., who is cited in an MSN website article. It also doesn't hurt for the person to seek financial wisdom and a wise investor (estate planning, good life insurance and a will drawn up or re-executed).

Revocable Trust Considered Best

According to an article on ProfessorBeyer.com by Gerry W. Beyer and Jessica Petrini, "The best entity to form for an individual (lottery) winner is a revocable trust." The execution of a revocable trust does not require the incorporation of a legal business entity.

Bottom Line

It is important for a lottery winner to incorporate if she plans to put most or all of her lottery winnings into real estate investments. Otherwise, a revocable trust can be formed by an individual without an incorporated business entity.

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