Legal Question in Wills and Trusts in Michigan
Leaving uncollected tax winnings in a will.
Hello,
Several friends an I were discussing what would happen if we were fortunate enough to win a rather large lottery. Whether to take it as a lump payment and take less, or receive it as an annunity over 25 years.
My question is this,...should you win a large amount in a lottery and receive it as an annuity over 25 years, and die before the whole amount is paid out, can you leave it to someone in a will or other legal document?
The three thoughts given were these. 1.) The money is owed to you like a debt, and must be paid to your estate. 2.) That the debt is ended when you die, and no one can claim any part of it. And 3.) It can only be passed to someone else of your choosing if you actually put it in a will or other legal document.
This has been a topic of conversation for a while now, and I hope to finally find out what would happen in this circumstance.
Thank you.
1 Answer from Attorneys
Re: Leaving uncollected tax winnings in a will.
In general, a debt that is owed to you when you die would still be owed to your estate, whether it is in your will or not.
Each lottery will have its own rules. Look for a rule that says whether the winnings will continue to be paid after death, or whether the payments stop upon the payee's death.
I just looked up the Mega Millions rules, and they say: "If a winner dies before receiving all annual payments, Mega Millions will continue to pay the annual payments, as scheduled, to the winner's designated beneficiary or to the winner's estate."
http://www.megamillions.com/aboutus/lottery_faq.asp
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