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I never saw a lottery pay cheque to the order of winner "in trust", before this news on Aug. 21 2024. Why not just pay to the order of "JAMES B."? Why add "in trust"?

as requested, user provided photo provided inline via edit

I tried to do research. Page 145 defines trust

When a person has rights which he is bound to exercise upon behalf of another or for the accomplishment of some particular purpose he is said to have those rights in trust for that other or for that purpose and he is called a trustee.

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  • They could have a living trust already set up. They may have set up an irrevocable trust to place the winnings into.
    – Jon Custer
    Commented Sep 19 at 21:27
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    @JonCuster your comment went over my head. "living trust"? "irrevocable trust"?
    – user16249
    Commented Sep 19 at 22:11
  • Roger that. There is a tag for trusts on this SE to search on
    – Jon Custer
    Commented Sep 19 at 22:33
  • Given this is referencing the BC Lotto Corp, maybe tag it with British Columbia and/or Canada (as we do not pay taxes on lottery winnings)
    – Canadian Luke
    Commented Sep 20 at 21:08
  • Also note that it's a fake cheque. It doesn't matter what you write on it from a legal or financial point of view.
    – DJClayworth
    Commented Sep 23 at 3:42

2 Answers 2

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The article states that he's accepting the money on behalf of a group that purchased the tickets together. Using a Trust or LLC can let the members remain anonymous if the lottery allows it. In some cases it may reduce taxes before the money is distributed - though this is a Canadian lottery so I wouldn't expect these winnings to be taxed.

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Important point: That's thing he's holding is not a real check that will get deposited. It is purely symbolic for purposes of the photo. Note that it's also made out to James B. rather than a full name.

Without knowing the details of that particular lottery, it is also possible that the lottery is, in fact, going to hold the money in trust and pay out a smaller amount each year for some number of years. That is fairly common, since it lets the lottery take advantage of investment gains on that money in the meantime, such that the actual cost to them is less than the nominal total. Spreading out the payments may also have tax advantages for the winner, so this isn't necessarily a bad thing, though it does make the stated value of the prize somewhat misleading. Always read the fine print, and understand the trade-offs that may be offered to you.

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    You should perhaps clarify that giant checks can be real, but this particular giant check is not since it is missing required elements such as the name of the bank, the account number, and the signature of the account holder.
    – David42
    Commented Sep 20 at 13:33
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    @keshlam: That doesn't mean the check isn't a real (i.e., legally valid) check. It just means that banks may refuse to process it.
    – Brian
    Commented Sep 20 at 15:19
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    Multimillion dollar checks in general are probably not going to be processed fully automatically, when that kind of money moves around it's worth a couple minutes of manual inspection by a bank employee.
    – Ben Voigt
    Commented Sep 20 at 18:04
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    I was on the receiving end of one of those cheques once, and I was very disappointed to learn it was basically a whiteboard, and they wiped off my name to use for the next guy. I really hoped I was going to get to keep it.
    – Darren
    Commented Sep 20 at 18:13
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    @Darren Hopefully you can use some of your winnings to purchase your own giant cheque whiteboard!
    – Chris Bouchard
    Commented Sep 20 at 23:14

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