Here's What Happens When a Powerball Winner Doesn't Claim Their Prize

I know I'm supposed to be a sensible personal finance writer providing sound advice about how to help your money go further, but I'm also human. And that means that huge lottery jackpots like Powerball's estimated $1.4 billion drawing for Saturday still catch my eye. There's almost no one on earth that kind of money wouldn't be life-changing for, and I have plenty of ideas for how I'd like to spend it.

But like most people who have ever played the lottery, I'm all too familiar with the sting of defeat when the jackpot's finally won and I'm not holding the golden ticket. You might try to console yourself by hoping that the winner doesn't come forward to claim their prize, but what happens then? It's possible the money could come back to you, just not in the way you think.

How long do Powerball winners have to claim their winnings?

First things first, we have to talk about what it means to claim -- and not claim -- your prize. All Powerball prizes have to be claimed in the jurisdiction -- that is, the state or territory -- where the ticket was purchased. It's not possible to buy the ticket in one state and claim it in another. However, it's totally fine to buy a ticket in a state you don't live in. You just might have to make a trek across state lines to get your cash if you win.

Claiming Powerball winnings under $600 is pretty straightforward. You can take the ticket to any licensed lottery retailer -- think anywhere where you can buy a Powerball ticket -- and exchange it for cash. But things are more complicated for larger prizes.

When you win more than $600, you need to claim your winnings at a lottery office or even your state lottery headquarters. You can find yours by looking up the lottery offices in the state where you purchased the ticket.

And no matter the size of the prize, you also have to claim it within a reasonable amount of time after the drawing. That depends on the jurisdiction where you bought the ticket. You typically have 90 days to one year after the drawing itself. The back of your ticket may have the expiration date listed on it. If not, check with your state lottery office to learn how long you have to claim.

If you fail to turn in your ticket to the appropriate lottery location by the deadline, you forfeit your prize.

What happens when the winner doesn't claim a Powerball prize?

You might expect that unclaimed Powerball prizes would go back into the Powerball jackpot, giving you another chance at the winnings, but that's not what happens. Once the deadline is up, Powerball distributes the jackpot proportionally to all jurisdictions.

Let's use the current $1.4 billion jackpot as an example. Say someone wins that on Saturday and they fail to claim their prize. After the jurisdiction's claiming deadline has passed, Powerball splits the money amongst all jurisdictions where people bought tickets. And with the jackpot this high, that's basically everywhere. 

If one state sold 5% of all tickets during the draw run -- the series of consecutive drawings with no winner -- then it would get 5% of the $1.4 billion jackpot, or about $70 million. And if another state sold 3%, it would get 3% of the jackpot, or $42 million.

What happens next is up to the jurisdictions. Each has its own rules about what to do with unclaimed prize money. Some put that money into other lottery games within the state. Others put it into the state's general fund, where it might be used to pay for things like the salaries of government employees or education or infrastructure costs within the state.

So while you probably won't notice the benefit directly, it's possible you still could gain from an unclaimed Powerball prize if your state chooses to reinvest that money into state programs. I know, that's not nearly as fun as getting another shot at fattening your savings account, but it's better than nothing, right?

If you're curious how your state uses unclaimed lottery winnings, check with your state's lottery office or look up your state's laws regarding lottery winnings online. And if you're lucky enough to be the one holding the winning ticket at the end of this draw run, please do yourself a favor and claim it promptly so you don't have to worry about any of this.