First Off, this assumes that you live or won in a state where you can claim a prize anonymously, either via Trust, or via an LLC. There are a few more exotic ways that prizes can be claimed anonymously, but the approaches outlined here are the most common. While I am an attorney, this is not legal advice, this is just what I would do myself.

1. Claim Via Trust

Hire an attorney to draft an agreement for a prize claiming trust. Assuming that you are the sole winner, or a group of winners, make a Delaware LLC the beneficiary of the claiming trust. Why Delaware? It allows for "anonymous" members to own it. FinCen rules have changed that to a large degree, but those records are not public information.

Why? Because you are going to want to borrow some money in the name of that LLC to put your asset protection plan in place BEFORE you make your claim, so that even if there is a lawsuit similar to the one filed against Edwin Castro, which claiming anonymously will make more difficult, you will have a strong plan in place to prevent ever losing your winning from day one.

This assumes you don't already have $100K laying around to put your strategy in place which I think is probably enough to pay for the structures you will want to put in place.

Your claiming trust will be a Nevada Asset Protection Trust which should provide some protection from claims of potential creditors against the claiming trust, but that is just step two in the asset protection plan.

Oh and why step one is to form the Delaware LLC even before you execute the trust agreement is because you are going to want to move BEFORE you claim the prize.

You will take that loan money and get on a plane to Vegas or Reno and rent yourself an apartment. You will you will set up utilities. You will change your driver's license to Nevada. You will get health insurance in Nevada. Your domicile will become Nevada. You might remain tax resident for this year in your current home state, but at the time you execute the trust, you will be a Nevada resident. Why? Because many states claim that a Trust is domiciled in their state if you are domiciled there when you execute the trust and that it will remain domiciled there. You want legal grounds that it is domiciled in Nevada with its strong asset protection laws and that it is not domiciled in the state you claim the prize in, but more importantly, you want no state to have jurisdiction over the follow on trusts.

Oh, and this is all just sort of step one of protecting the claiming trust, there are a lot more steps and more complex trusts involved in the second half of the asset protection strategy. The Trustee for your Nevada claiming asset protection trust will be a licensed Nevada Retail Trustee. Basically a public company that is legally bound to protect your anonymity, even though the direct beneficiary is that LLC.

You will have more steps to complete beginning with 3 below if a Trust is your claiming vehicle of choice. If not, then your step one will be 2 below.

1. Claim Via an LLC

If you are in a state that does not allow a trust to claim the prize, but does allow an LLC to claim the prize, well, step one is to form a Delaware LLC again which will claim the prize. This LLC will initially be owned by you or any partners you have in regards to the winning lottery ticket, but its going to be doing some borrowing in its own name before you cash in the winning ticket.

You again are likely going to need about $100k or maybe less to set up this asset protection/anonymity plan for managing your money.

You once again are going to move to Nevada, or maybe South Dakota. I personally say Nevada because while I love the Black Hills, there is a lot more to do in Vegas or Reno. You are going to establish domicile in Nevada by getting an apartment there, and utilities, and a driver's license and health insurance BEFORE you execute an trust documents as part of your overall strategy.

1. Now, regardless of if your Delaware LLC is the beneficiary of a Nevada claiming trust or it is claiming the prize itself, the next part of this strategy is the same.

DAPT vs. FAPT Your Asset Protection Trust

You have a choice to make, foreign or domestic? Do you want to use South Dakota if you moved there, or Nevada if you moved there's Domestic Asset Protection Trust laws, or do you want to use Foreign Asset Protection Trust laws to keep your money out of the hands of anyone who decides they want to sue you because you won that jackpot?

The Full Faith and Credit Clause of the US Constitution tells me that I am going to be heading offshore for my asset protection plan personally, but you can go domestic if that is your choice. There are less reporting requirements and paperwork headaches associated with a Domestic Asset Protection Trust than with a FAPT, but the laws of 3 foreign jurisdictions provide very strong disincentives to anyone who might want to sue you that the Full Faith and Credit Clause might overcome. The offshore strategy will make contingency lawyers think twice as the US Government has not been able to successfully pierce the veil of properly structured Cook Islands Asset Protection Trusts.

Now literally the US government has sued in the Cook Islands and failed to get money out of such trusts, but Belize has a shorter statute of limitations on "fraudulent conveyance" than the Cook Islands, 0 days vs, 1 year to commence a cause, or 2 years from the date of transfer of assets to the trust. The same statute of limitations applies to Nevis Trusts as Cook Islands, but they all have their own benefits and drawbacks.

The Cook Islands are a basically a protectorate of New Zealand, but an independent country too, sort of a weirder gray area than territories like the British Virgin Islands which are part of the UK techically, but independent technically, or the US Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, or Puerto Rico which are part of the US, but also sort of autonomous. Now New Zealand is one of the least corrupt jurisdictions on earth and the Cook Islands are pretty much a lilly white jurisdiction in the offshore world because of that fact. Belize has been more prone to corruption, and St Kitts has been on EU or FATF grey lists, and while being a fairly reputable jurisdiction, they have been seriously pressured by the EU and US in recent years in ways that give me pause.

For me, I would set up the Trust which will own either the beneficiary LLC or the claiming LLC in the Cook Islands, but if I were staying domestic, then I would have Nevada be my home. Just me, but South Dakota has some things going for it too. Both are "tax neutral" as states, but there is less to do in South Dakota and if I were going domestic, I would live in the state I chose.

Now these states are not the only ones with asset protection trust statutes, but they are the most popular. If you prefer Alaska, it has one and so does Wyoming. Both are pretty strong.

1. Once you have settled on Foreign, or Domestic and chosen your jurisdiction it is time to form ANOTHER COMPANY.

Nevada and South Dakota domestically both allow you to form a Family Trust Company, an LLC or Corporation which will act as the corporate trustee of your domestic asset protection trust.

The Cook Islands likewise allows you to form a Family Trust Company in its jurisdiction to manage and control the assets.

So Before you execute your trust, you will set up a Family Trust Company in whatever Jurisdiction you choose. Foreign involves more reporting to FinCen and the IRS, but essentially as you should be spending any money that comes into the trust company to pay Investment Advisors on your board, CPAs on your board, pay a local attorney on your board of directors, and pay an bank or brokerage fees associated with your trust accounts, there should be no profits in these companies to pay any taxes on. The funds paid to the private family trust company should be a wash.

Foreign or Domestic there is a lot of licensing and other paperwork to file to set up these Trust Companies, which should allow you to manage your investments directly as a member of the board and officer of the trust company. If you go domestic, I would set up an LLC and have it elect to be taxed as a C-Corp to be able to deduct the expenses from managing your investments as much as practical. Under current Cook Islands law, the company you set up there will be tax resident there. You will have to report your controlled foreign corporation to the IRS and I believe to FinCen too, but expenses should make it a wash tax wise both in the Cook Islands and US. Worst case scenario, your fees and expenses are not tax deductible and you have to eat the tax costs on paying a few thousand dollars a year in fees to board members/advisors, but probably not. I will admit that fees and expenses associated with trust management is not something I ever looked too closely into regarding tax deductibility. I would assume that they are deductible as an ordinary and necessary expense, but...

1. You create a special purpose asset protection trust to own the trust company. I would have a trust protector who could direct the Trustee of the Licensed Public Trust Company that is the trustee of that trust which owns your trust company to appoint members of the board as you see fit. I would also include in the by-laws of the private trust company rules which automatically remove members of the board of directors and alert the Trust Protector to name replacement members in the Cook Islands in the event you or any other US member of the board becomes "distressed" by being the subject of a lawsuit, and giving the corporate public trustee account signing authority over the trust company's trust accounts in such an event.

If you go domestic, you are going to have to comply with any orders from US judges as will any members of the trust company's management team. If you go offshore, the only people who can be ordered by a US court to comply are those people subject to US jurisdiction, or ANY JURISDICTION not a ratified signatory to the Hague Convention on Trusts. The US signed it, but didn't ratify it. Someone figured out that it would strip US courts of power to protect creditors against US persons who had offshore trusts that they in any way managed.

Now the Cook Islands, unlike Belize may honor a Mareva Injunction issued in a foreign jurisdiction. It won't honor a foreign judgement. You have to prove your case for a fraud in the Cook Islands beyond a reasonable doubt to pierce the veil of a Cook Islands Trust, but it will freeze your assets. Belize won't even honor a foreign Mareva Injunction under their statute.

The Cook Islands is further away, which makes it harder to prosecute a case against you. It has a lilly white reputation, and deservedly so, and it is easier to get bank accounts, or brokerage accounts than Belize, but if you have attorneys and accountants working with you who can get banking and brokerage accounts for a Belize Trust Company in strong financial centers which are signatories to the Hague Convention on Trusts like the UK, Switzerland, Lichtenstein, Jersey, Guernsey, the Isle of Man, and Panama, then Belize may be the way to go, BUT, if you draft your trust agreement carefully, the Protector of the Trust, typically a law firm in the jurisdiction of the Trust, or "maybe," just maybe in a third jurisdiction -not your home country- and another strong asset protection jurisdiction may have the right to appoint a new trustee in Belize -ie a public trust company there to act as trustee, and transfer jurisdiction, both situs, and the laws which govern the trust to a new asset protection jurisdiction if you have been sued -in particular during the first two years after the trust is settled.

1. Execute the Trust which will own the Delaware LLC and to which the proceeds of the win will be distributed by the Delaware LLC -after it has paid back the loan you took out in its name to set up your structure.

I would also set aside a carve out within the trust of a payment from any distribution of the Delaware LLC to be paid by the trustee to any pre-existing creditors. Pay off all your debts to further solidify that nothing in your transfer was done to defraud your creditors' claims. Figure out what you owe in addition to what the Delaware LLC will owe and set that aside as a payoff amount from the initial funds.

1. Set up a bank account for the private trust company, either in the state you chose for a domestic trust or in the jurisdiction you chose offshore. This should be a small transactional account for the day to day maintenance of the trust company to pay its bills.

2. Set up a bank account for the trust which will recieve the distribution from the beneficiary or claiming Deleware LLC. Go through the KYC either in the US for a domestic trust, or for my money, probably Lichtenstein, Jersey, or Guernsey because they have no withholding tax on interest earned. My first choice would probably be Lichtestein because they have accounts in Swiss Francs and that is the most stable currency on earth. It never suffers from inflation. Of course this assumes that FATCA and your jurisdiction of choice for your Trust are not a problem. You are going to want an experienced attorney, or banking introducer to set you up with this, and the same goes for an offshore brokerage account, which may be more difficult to find, unless of course the bank has their own brokerage account, which most due. You are going to be on the private banking side of the house and will be depositing millions of dollars into your account.

You will want to do your due diligence. You will also probably want multiple accounts. You will probably have accounts in all of the above mentioned jurisdictions with various banks. I would personally choose small banks if possible as opposed to global banks which have US branches to get the maximum protection from creditors. You do not want your money in banks that are answerable to US regulators.

1. Have your attorney/representative of the trust or LLC claim the prize.

2. Have the Trustee distribute the money to the LLC if claimed via a trust.

3. Have the claiming or beneficiary LLC pay its bills on the loan you took out to pay for this structuring and anonymity.

4. Have the LLC distribute the money to your asset protection trust.

5. Invest the money via your various banks/brokerage accounts. Personally my don't lose money philosophy says use the golden butterly portfolio strategy, today maybe with a small addition of an exposure to crypto currencies, but that is just my thoughts. Invest how you want.

6. Set up LLCs to own your home/homes, or vehicles. Have those LLCs owned by the trust. Have the LLCs strip out the equity with loans owned by a third-party to further protect your assets from any potential lawsuits out there, and carry adequate auto and home owners insurance.

is it possible someone could still sue you and get your money after you took these steps?

Yes, but it becomes very unlikely that anyone will be able to sue you and get to your money. Your money also should remain pretty liquid to be able to pay for any defense of any lawsuit or your normal expenses if you are sued.

THE BIGGEST ADVANTAGE I SEE TO THIS STRATEGY IS THAT CONTINGENCY LAWYERS WILL ALMOST IMMEDIATELY REALISE THESE DEEP POCKETS ARE ATTACHED TO A DRY HOLE.