Ohio Administrative Code › Title 3770:1 - Lottery Commission › Chapter 3770:1-8 - Claiming and Payment of Prizes › Section 3770:1-8-01 - Persons entitled to receive prizes

Current through all regulations passed and filed through July 1, 2024
(A) Valid tickets. Every ticket which is duly
			 sold or is deemed to be duly sold in accordance with these rules and
			 regulations will be valid unless otherwise made void in accordance with the
			 rules. Tickets are bearer instruments and only the holder of a valid winning
			 ticket will be entitled to the lottery prize award if such winning ticket is
			 fully validated and the prize is claimed and presented for payment within the
			 established redemption period as specified in rule
			 3770:1-8-04
			 of the Administrative Code. Tickets which are stolen from the state lottery,
			 its employees, agents or representatives, or are otherwise acquired without
			 ever having been lawfully sold, or deemed to be sold, in accordance with the
			 rules of the commission and the regulations of the director, and tickets which
			 are torn, altered, mutilated, or that do not comply with the applicable game
			 rules may be declared void by the director.
(B) Claimant eligible to receive payment.
(1) A lottery prize award shall be claimed by
			 the holder of a winning ticket, or by the executor or administrator of the
			 estate or the trustee of a trust, of a deceased holder of a winning ticket, in
			 the manner prescribed in rule
			 3770:1-8-02
			 of the Administrative Code.
(2) No
			 right of any prize winner to a lottery prize award shall be the subject of a
			 security interest or used as collateral.
(3)
(a)
			 Pursuant to the provisions of paragraphs (B)(3)(a) to (B)(3)(e) of this rule,
			 upon the death of a deferred prize winner, the executor or administrator of the
			 deceased deferred prize winner's estate, or the trustee of the trust benefiting
			 a deceased deferred prize winner, may elect to receive the remainder of the
			 lottery prize award in the form of a discounted lump sum cash settlement,
			 provided that the lottery prize award is not subject to a transfer agreement
			 pursuant to sections 3770.10 to
			 3770.14 of Revised Code and the
			 provisions contained in this rule. The amount of the discounted lump sum cash
			 settlement shall be determined by calculating, as of the valuation date, the
			 discounted value of the remaining future payments under the lottery prize award
			 in accordance with generally accepted accounting principles using the discount
			 rate formula hereinafter provided and then withholding the appropriate amount
			 of state and federal income taxes as required by law. The valuation date shall
			 be the first business day of the month immediately subsequent to the month in
			 which the commission receives notification of the executor's, administrator's
			 or trustee's election in accordance with paragraph (B)(3)(d) of this rule. The
			 director shall disclose in writing to the executor, administrator or trustee
			 the amount of the lump sum cash settlement, the discount rate used and the
			 state and federal income taxes to be withheld. However, if the deferred lottery
			 prize award was won in a statewide joint lottery game, the executor,
			 administrator or trustee may elect to receive the present cash value for the
			 remainder of such prize award calculated in accordance with the applicable
			 section of the statewide joint lottery game rule under which prize winners may
			 elect to receive a cash option prize.
(b) The discount rate to be used in
			 determining the discounted lump sum cash settlement in paragraphs (B)(3)(a) to
			 (B)(3)(e) of this rule shall be the cash option discount rate available at the
			 time the prize was won based on the formula established by the director
			 pursuant to authority granted under paragraph (C)(4) of rule
			 3770:1-8-04
			 of the Administrative Code. If no cash option discount rate was available at
			 the time the original lottery prize award was won, the discount rate shall be
			 the cash option discount rate that would have existed based on the formula
			 established by the director pursuant to authority granted under paragraph
			 (C)(4) of rule
			 3770:1-8-04
			 of the Administrative Code for determining the cash option discount rate
			 formula. If the deferred prize award is a lifetime prize paid in an annual or
			 monthly installment, the executor, administrator or trustee may elect to
			 receive the present cash value for the remainder of such prize award as set
			 forth in paragraph (B)(3)(c) of this rule with the present cash value based on
			 the discount rate used by the lottery commission to fund deferred prize awards
			 as of the date the prize was claimed. If the deferred lottery prize award was
			 won in a statewide joint lottery game, the executor, administrator or trustee
			 may elect to receive the present cash value for the remainder of that lottery
			 prize award calculated in accordance with the applicable section of the
			 statewide joint lottery game rule under which prize winners may elect to
			 receive a cash option prize.
(c) In
			 the case of a lifetime annual or a monthly installment deferred prize winner,
			 the payments to be valued shall be the future payments to be made to the
			 executor or administrator of the deceased prize winner's estate, or the trustee
			 of the trust benefiting a deceased deferred prize winner, which, when added to
			 the payments previously paid to such person and/or the prize winner, total the
			 minimum guaranteed lottery prize award required under the game for which such
			 award was granted as subject to the valuation requirements of paragraph
			 (B)(3)(b) of this rule. If the minimum guaranteed lottery prize award was
			 reached and paid during the life of the deceased prize winner, no discounted
			 lump sum will be available to the deceased prize winner's estate or
			 trust.
(d) To elect the option
			 described in paragraphs (B)(3)(a) to (B)(3)(e) of this rule, the executor or
			 administrator of the estate of a deceased, deferred prize winner or the trustee
			 of a trust benefiting a deceased deferred prize winner shall:
(i) In the case of an annual installment
			 deferred prize winner, provide the commission written notice of election within
			 sixty days following the later of:
(a) The
			 first annual payment following the prize winner's death; or
(b) The appointment of a legal representative
			 for the deceased prize winner's estate; or
(ii) In the case of a lifetime installment
			 deferred prize winner, provide the commission written notice of election within
			 sixty days following the later of:
(a) The
			 first payment following the prize winner's death; or
(b) The appointment of a legal representative
			 for the deceased prize winner's estate.
(e) Upon receiving a notice of election, the
			 commission shall cease making any further payments on the lottery prize award,
			 and shall process the discounted lump sum cash settlement within a reasonable
			 period of time, but in no event any longer than ninety days following the
			 commission's receipt of the notice of election.
(f) Any estate or trust that receives a
			 discounted lump sum cash settlement pursuant to this rule shall be responsible
			 for payment of any fee which may be levied by the treasurer of state for early
			 withdrawal of funds from the deferred prizes trust fund.
(i) The director may refuse to pay a
			 discounted lump sum cash settlement to the executor or administrator of a
			 deceased prize winner's estate, or the trustee of a trust benefiting a deceased
			 prize winner if the director learns that any beneficiary who will subsequently
			 receive the discounted lump sum cash settlement is in default on or is under a
			 continuing child support or spousal support order as defined in sections
			 
											
												3119.01,
			 3105.18, and
			 3770.071 of the Revised Code or
			 indebted to the state under section
			 3770.073 of the Revised
			 Code.
(ii) The director may agree
			 to pay a portion of the remainder of a deferred lottery prize award to the
			 executor or administrator of a deceased prize winner's estate, or the trustee
			 of a trust benefiting a deceased prize winner if the director learns that any
			 beneficiary who will subsequently receive the discounted lump sum cash
			 settlement is in default of or subject to a continuing child and/or spousal
			 support order or is indebted to the state, provided that the discounted lump
			 sum cash settlement does not include amounts owing on a child or spousal
			 support arrearage, or amounts subject to a valid and continuing child or
			 spousal support order, or amounts subject to state debt withholding, and that
			 the appropriate state and federal income taxes are withheld on such amounts.
			 The provisions of this paragraph apply only to the extent of the
			 obligor/beneficiary's share of the discounted lump sum cash settlement payable
			 to the estate or trust.
(iii) An
			 election under this subsection may not be made by the executor or administrator
			 of a deceased prize winner's estate, or the trustee of a trust benefiting a
			 deceased prize winner, when there are fewer than two annual deferred payments
			 remaining; or in the case of a lifetime deferred lottery prize award, when
			 there are fewer than twelve monthly or four quarterly payments remaining; or at
			 any time within the last year during which payments were to be made to the
			 deferred prize winner.
(4) Assignments and/or transfers of lottery
			 prize awards are governed by sections
			 3770.07, and
			 3770.10 to
			 3770.14 of the Revised Code.
(a) If the lottery prize award is a lifetime
			 or a monthly installment deferred prize and the prize winner desires to
			 transfer that prize award, the prize winner may only transfer the minimum
			 guaranteed prize to which the prize winner is entitled pursuant to the
			 applicable game rule. The prize winner shall then forfeit any right they would
			 have to amounts beyond the guaranteed minimum associated with a lifetime
			 lottery prize award should they live beyond the number of months or years
			 associated with that guaranteed minimum amount.
(5) Partial assignments and/or transfers of
			 lottery prize awards are governed by section
			 3770.121 of the Revised
			 Code.
(6)
(a) Upon receipt of a court order issued
			 under section 3770.13 of the Revised Code, the
			 transferee shall provide a certified copy of the court order to the director of
			 the commission. Not later than ten calendar days after receipt of the certified
			 copy of the court order, the director shall acknowledge to the transferee in
			 writing the commission's intent to comply with the court order in making future
			 payments.
(b) The director shall
			 make payments of the lottery prize award to the transferee designated in the
			 certified copy of the court order and in accordance with the prize payment
			 schedule established when the prize was claimed. A processing fee in the amount
			 of two hundred fifty dollars shall be remitted by the transferee via money
			 order made payable to the Ohio lottery commission subsequent to court approval
			 of the lottery prize award transfer, to cover any direct or indirect costs
			 associated with adjusting the prize award payments for the transferee in
			 accordance with that prize payment schedule.
(c) Upon payment of any lottery prize award
			 pursuant to paragraph (B)(6)(b) of this rule, the director and the commission
			 are discharged from all further liability therefor.
(7) Garnishment, attachment, execution,
			 withholding, or deduction of a lottery prize award is authorized by division
			 (D) of section 3770.07 of the Revised Code and
			 is subject to the following rules:
(a) Any
			 creditor with a court order judgment against a lottery prize winner who has an
			 unpaid balance prize award of one hundred thousand dollars or more, shall apply
			 with the same court for a hearing to determine whether a garnishment,
			 attachment, execution, withholding, or deduction should be issued against the
			 prize winner's lottery prize award.
(b) The creditor shall duly notify all
			 interested parties, by certified mail, return receipt requested, including the
			 prize winner and the lottery commission at least thirty days prior to the
			 hearing date.
(c) Upon the court's
			 final determination whereby a garnishment, attachment, execution, withholding,
			 or deduction should be issued, the creditor shall provide a certified copy of
			 such order to the lottery commission.
(d) Any withholdings pursuant to such order
			 shall be in accordance with the prize payment schedule established when the
			 prize was claimed. The lottery commission shall not accelerate any future
			 annual payments to fulfill the judgment amount in the order. The lottery
			 commission shall not pay the entire judgment amount if such amount is beyond
			 the total net prize award payable to the prize winner.
(e) Upon payment of any lottery prize award
			 pursuant to paragraph (B)(7) of this rule, the director and the commission are
			 discharged from all further liability therefor.