What is the difference between the annuity option and cash value option?
A Powerball jackpot winner may choose to the receive their prize in 30 annual payments or a one-time, lump-sum cash payment. The cash value option, in general, is the amount of money required to be in the jackpot prize pool, on the day of the drawing, to fund the estimated jackpot annuity prize. The advertised jackpot annuity and cash value are estimates until ticket sales are final, and for the annuity, until the Multi-State Lottery Association takes bids on the purchase of securities.
Federal and jurisdictional income taxes apply to both jackpot prize options.
Check with your lottery for its rules on how to claim a jackpot prize and the correct procedure for selecting the annuity or cash value option.
What happens to an annuity prize if the winner dies?
If a jackpot winner dies before receiving all annual installments, the balance of the prize will be paid to the winner's estate. Upon receipt of a court order, annual prize payments will continue to be paid to the winner's heirs. Other provisions may also apply depending on the laws of the lottery paying the prize.