What to do if your client wins the lottery
Melanie Jones, senior vice president, Evoke Advisors
The principle of the 'time value of money' suggests that taking a lump-sum lottery payment is better than an annuity. Alongside a prudent adviser, one can invest their winnings and likely outperform the annuity payments. While taxes are due on the lump sum immediately, you take out the risk of having potentially higher taxes in the future and therefore higher taxation on the annuity.