You took a prize as yearly payments, or inherited them, and want part of that money now. We check what your state permits, price the payments with competing buyers, and show the discount rate behind every offer.
Four ways prize winners and heirs give up more than they need to.
Every offer comes with the rate and the math.
| Yearly payment | $50,000 |
|---|---|
| Payments left | 15 |
| Total of payments | $750,000 |
| Buyer's discount rate | 8.0% |
| Lump sum before costs | $427,974 |
| Discount from total | 42.9% |
| Our fee | built into the price |
| Sell all 15 payments | Sell the next 5 | Keep them | |
|---|---|---|---|
| Cash today | $427,974 | $199,636 | $0 |
| Payments still coming to you | None | 10 payments of $50,000 | 15 payments of $50,000 |
| Total you receive | $427,974 | $699,636 | $750,000 |
| What you give up | Every future check | The next five checks | A lump sum now |
Illustrative example: $50,000 a year, next check a year away, at an 8% discount rate, before court and legal costs. Totals add up the payments as scheduled and are not adjusted for the value of money over time.
The prize claim paperworkThe lottery's payment scheduleA recent payment noticeEstate or trust documents, if not the winnerWhen you took a large lottery prize as an annuity rather than the cash option, the lottery agreed to pay you in yearly installments, often for 20 or 30 years. The lottery usually funds those payments by buying government bonds or an insurance annuity, and a check arrives once a year.
Selling means assigning some or all of the remaining checks to a buyer in exchange for a lump sum now. Once the sale is approved, the lottery pays the checks you sold to the buyer and keeps paying you any you kept. For the background on this market, read how lottery payment sales work.
Lottery prizes are generally not assignable unless state law says they are. Each state lottery sets its own terms, and a few do not permit sales at all. Where a sale is allowed, expect some or all of these:
Check your state lottery’s rules on assignment and talk to a local attorney before you sign anything. If your state does not allow a sale, no legitimate buyer can complete one, whatever they tell you on the phone.
Because lottery payments come once a year, the date of the next check matters. If it is close, it may make sense to collect it yourself and sell the payments after it. The court step adds time on top of the paperwork, and that time depends on the state and the court’s calendar. We cannot promise a closing date, and we will tell you plainly what is holding a file up.
Lottery winnings are taxable, and a lump sum received for future prize payments is generally treated as ordinary income in the year you receive it. That can push a large sale into a higher bracket. Legal, court and processing costs usually come out of the lump sum as well, so ask for the net figure in writing and take both to a tax adviser before the hearing.
A long stream of annual payments is very sensitive to the discount rate, because so much of the money is many years away. On a 15-year stream, every two points of discount rate on $50,000 a year moves the price by roughly $40,000 to $58,000. If you do not have a specific use for the cash, if the payments are your retirement income, or if the only offer you hold implies a rate well above other quotes, keeping the payments is a sound decision.
If you do sell, sell what covers the need: the next few checks, part of each check, or a block of later years, as your state allows. Compare offers on their discount rate and net cash using how to compare offers, and see the other payment streams we buy and broker if you hold more than one.
No. Prizes are generally not assignable unless state law allows it, and each state sets its own terms. Some require a court order and limit how much can be sold, and a few do not allow sales at all.
Often, yes. Estate taxes can fall due long before the payments arrive, which is a common reason estates sell. The executor or trustee usually signs, and the same state rules and court step apply.
Because so much of the money is many years away, and every year of waiting is discounted again. On a 15-year stream, a few points of rate change the price by tens of thousands of dollars, which is why the rate matters more than the headline figure.
Usually. The next few checks, part of each check, or a block of later years are all common, as long as your state allows that structure.
Generally yes, as ordinary income in the year you receive it, which can push a large sale into a higher bracket. Talk to a tax adviser before the court hearing.