16 Tex. Admin. Code § 401.310 - Payment of Prize Payments Upon Death of Prize Winner
(a) The personal representative of the estate
of a deceased prize winner entitled to payment of lottery prize installment
payments pursuant to the State Lottery Act §466.406(b), may petition the
executive director to pay the net present value all of the remaining lottery
prize installment payments, not previously assigned, in a lump sum payment to
the estate. For this rule, "prize winner" means an individual who claimed the
prize as an individual and not as a representative of a legal entity and does
not include a legal entity. The personal representative of the estate must
present with the petition to the executive director an order from the proper
Probate Court in compliance with the requirements set out in part (b), below.
(1) The net present value lump sum payment to
be distributed shall represent the lesser of the commission's book value or
fair market value of that portion of the unassigned future installment payments
that are to be paid to the estate, less any applicable taxes or other offsets
required by the State Lottery Act, Texas Government Code Chapter 466. The
commission's book value is the daily recalculated amortized cost of investments
under the interest method. The fair market value is the value of investments at
any point in time as determined by the market place.
(2) The valuation of the securities at the
lower of the commission's book value or fair market value and the determination
of the net present value of the remaining unassigned installment payments shall
be at the sole determination and discretion of the executive
director.
(3) The securities and/or
cash representing the future lottery prize installment payments held for the
deceased prize winner, not previously assigned, shall be distributed to the
estate of the deceased prize winner by payment into the registry of the proper
Probate Court upon confirmation by the executive director of the Probate
Court's order's compliance with part (b) below.
(b) The commission shall require an order
from the proper Probate Court, in order to facilitate the payment of the
remaining unassigned lottery prize installment payments. The commission shall
require the order of the Probate Court to include, at a minimum, the following
language and findings:
(1) Language approving
the form and substance of the order by all representatives of the estate of the
deceased prize winner, whether such representatives are executors or
administrators and by all beneficiaries and/or heirs known and existing at the
time the order is signed by the Probate Judge;
(2) Language indicating that an attorney ad
litem was appointed by the court to represent and investigate the interests of
any unknown heirs, beneficiaries or claimants to the estate, and a finding by
the court, after full consideration of the attorney ad litem's report
documenting the investigation and findings, that the payment of the remaining
unassigned lottery prize installment payments is appropriate based on the
attorney ad litem's findings;
(3)
Language providing for indemnification and holding the commission harmless by
all representatives of the estate of the deceased prize winner from any and all
liability of the estate of the deceased prize winner for federal estate and
state inheritance taxes, or other tax liability, and including any offsets or
deductions required by the State Lottery Act, and from any claim known or
unknown, existing now or arising in the future, that may be made by a third
party as a result of the lump sum payment of the net present value of the
remaining unassigned lottery prize installment payments;
(4) Language providing that, upon payment of
the net present value of the remaining unassigned lottery prize installment
payments, the commission has satisfied in full its obligations to the estate of
the deceased prize winner, including the representatives, beneficiaries, heirs,
and any claimants to the estate, and shall be released from any further
liability to either the estate of the deceased prize winner or to the
beneficiaries, heirs, or claimants to the estate, whether known or unknown;
further, a proposed indemnification and release, approved by the commission and
representatives of the estate, will be submitted for approval by the Probate
Court prior to entry of the Probate Court's order and will be fully executed by
all representatives and beneficiaries or heirs of the estate prior to
distribution of the lump sum payment into the registry of the Probate
Court;
(5) Language requiring the
commission to pay the lump sum payment into the registry of the court within 30
days after the securities are liquidated, such liquidation being required by
signed order of the Probate Court. In the event there is a delay of time
between the sale of the securities and the payment into the registry of the
court, any interest earned during this period of time shall be kept by the
State of Texas;
(6) Language
providing that the Probate Court found by competent evidence that the payment
of the remaining net present value of the unassigned lottery prize installment
payments is necessary to pay the estate or inheritance tax burden imposed on
the estate by federal and/or state taxing authorities; and
(7) Based upon the facts and circumstances of
the underlying probate matter, the commission may require additional language
or findings to be set forth in the judicial order.
Notes
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