The Lottery and Estate Planning

If a resident of Maryland wins the Powerball drawing tonight, the winnings will be subject to a 25% federal tax and an 8.5% Maryland state tax.

If a Maryland winner passes away after claiming the check and proper estate planning is not completed, the majority of the winnings would be subject to the Maryland Estate Tax (16%), as well as the Federal Estate Tax (35%) and possibly the Maryland Inheritance Tax (10%).

Even if you are not a lottery winner, proper estate planning is essential to make sure that you, not the state, control how your assets are distributed upon your death.

The Law Office of Jane Frankel Sims provides common sense solutions to complex legal issues for clients at various income levels, not just lottery winners.

Good luck with your numbers!