Powerball jackpot hits $540 million: What to have before joining an office lottery pool, from the Sudden Money Institute founder

"Usually they don't think through all of the possibilities."


A half a billion dollars sounds like a nice way to ring in the new year.

The Powerball jackpot has grown to $540 million after no ticket matched all six numbers in the New Year's Day drawing, according to Powerball.com. The next drawing is Monday, January 3, at 11 p.m. ET.

The last time the Powerball jackpot hit was on October 4, 2021, when a single ticket in California won the $699.8 million prize. Since then, there have been 38 drawings in a row without a jackpot winner, according to Powerball.com.

If you're trying to increase your odds of winning by playing with a pool of people, like co-workers, you'll need to establish some ground rules, says Susan Bradley, a certified financial planner and founder of the Sudden Money Institute in Palm Beach Gardens, Florida.

"Any kind of a pool is risky. There's no legality around it people can use, and they make their own agreements and usually they don't think through all of the possibilities," says Bradley, who has advised past lottery winners who have won with a pool of others. Here's what you need to know — and what to do to protect yourself.

Joining a lottery pool? 'Have a written agreement'

No matter who you are playing the lottery with, "you have to have a written agreement," says Bradley. "The main thing with Powerball pools is to have clear agreements, who's in, who's not, and meet once in a while if you're going to do this all the time."

"Have fun and have a coffee together," Bradley says, and discuss terms. "Is everybody equal? Does everybody have to put money in weekly? Can somebody put in a year's worth in advance?"

It's important that "somebody has to be minding the money," she says.

Define who's participating in the lottery pool

When creating a written agreement, "define who's a member of the group," she says. "You have to cover when people don't put money in. Maybe they're out on a business trip, and you're doing this on a regular basis and they just forgot to give you the $20, and that's the week you won, are they in or are they out?"

Think these things through beforehand and come up with "a way for the contributors to kind of have some sort of acknowledgement that they put in," she says.

One way to acknowledge the players is by taking a picture of the tickets that were bought with the pooled money, "and circulate it so everybody can see," Bradley says.

What to do if you win the lottery

Video by Stephen Parkhurst

Agree how winners would divide a lottery jackpot

In your written agreement, define how the prize would be divided. "Talk about it. What are the rules? Is everybody equal? Did everyone put in the same amount? Does that mean everyone has to take [the prize] the same way?" Bradley says.

When you win the lottery you can decide whether or not to take the prize in a lump sum payment or as annual payments and how you choose makes a difference, she says.

For Monday night's jackpot, taking a lump sum would equal $384.3 million before taxes are taken out, whereas taking an annuity would equal 30 average annual payments of $18 million pretax, according to USAMega.com.

Establish rules for whoever is buying lottery tickets

Establishing the rules for whoever is in charge of buying the tickets is very important, says Bradley. In some pools, the person buying the ticket may be entitled to a bigger piece of the pie.

"Does somebody get extra because they go through the hassle of buying the ticket? That's the kind of stuff you have to talk about, because frequently people make up the rules afterwards," she says.

Does somebody get extra because they go through the hassle of buying the ticket? That's the kind of stuff you have to talk about.
Susan Bradley
Sudden Money Institute founder

"The classic is the person who's going to buy the tickets for the pool also buys a ticket for themselves and the ticket they bought for themselves happens to be the winner. That's the kind of thing you really want to clear up beforehand," she says.

To fix this, "the best way to do it is the person who buys them doesn't buy their own," Bradley says.

'It's fun to have the money, but it's complicated'

If you're a winner, Bradley suggests hiring a team of people she calls a "brain trust." The team would include a certified financial transitionist, a certified public accountant, an attorney, and a philanthropic consultant, she says.

When you win the lottery, "the way life is fades away pretty quickly, and you find you have a boatload of new responsibilities," she says. "It's fun to have the money, but it's complicated. There's a huge amount of planning that could be done in advance and that really can't be done on your own. You need to have a good team."

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