Huge Lottery Payout Raises Some Questions
Question: The recent California Lottery that was worth more than $60 million has raised a question in my mind. Winners are paid over a 20-year span. Suppose a winner dies after only five years. Will all California Lottery payments stop immediately, or will the winner’s heirs continue to receive them for another 15 years?--R.B.
Question No. 2: This trend in the lottery toward “pooling” money interests me. Doesn’t this greatly magnify the work--the payout--for the state when, instead of a single winner, they have 10, 20 or 30 winners?--K.F.
Answer: First question first--a million dollars is a million dollars is a million dollars. If you hold a lottery ticket worth a million dollars, to be paid out over 20 years, then that’s what you, or someone, is going to receive. Yes, if you don’t make it the full 20 years, then your heirs will pick it up.
Players have been “pooling” tickets since the lottery began. How popular this practice has become, though, didn’t really attract much attention until the giant pay-out of $60 million, which involved two pools--one of about 25 players and the other of about 16.
Because the average American moves about once every four years (there’s another average for you), and because during the next 20 years a few of the winners will probably die, who’s going to keep the records straight in making sure that all pool members get their fair share every time the annual pay-out comes around?
“We make only a single pay-out each year (to the person whose name is on the ticket),” the Lottery’s assistant director of public affairs, John Schade, says. “The pools have to make their own arrangements about the division of it.”
The lottery’s advice for pool players: “They should definitely have a written agreement spelling out the division and how the records will be kept. Our lawyers say it probably isn’t necessary to have it drawn up by a lawyer, or even have it notarized, but everyone definitely must sign it.”
Once a big win has been scored, of course, it might be a good idea to have the agreement looked over by a lawyer, and it is definitely advisable to retain a third party--a trust company, bank or some other intermediary who will be in business for a good 20 years--which, for a fee, will keep the books, keep track of address changes, keep track of the heirs of deceased winners and, once a year, will make the actual disbursements.
“I suppose,” Schade adds, “that in the case of out-and-out fraud, or someone absconding with the money, or something like that, we, at the lottery--since it’s spread over 20 years--would probably step in and get a judgment to protect the others. But, other than that, it’s up to the players themselves.”
Campbell cannot answer mail personally but will respond in this column to consumer questions of general interest. Write to Consumer Views, You section, The Times, Times Mirror Square, Los Angeles 90053.
