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90_SB0657
20 ILCS 1605/13 from Ch. 120, par. 1163
20 ILCS 1605/13.1 new
Amends the Illinois Lottery Law. Provides that under
certain conditions a prizewinner may assign all or part of
his or her prize winnings to another person.
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1 AN ACT to amend the Illinois Lottery Law by changing
2 Section 13 and adding Section 13.1.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Lottery Law is amended by
6 changing Section 13 and adding Section 13.1 as follows:
7 (20 ILCS 1605/13) (from Ch. 120, par. 1163)
8 Sec. 13. No prize, nor any portion of a prize, nor any
9 right of any person to a prize awarded shall be assignable,
10 except as provided in Section 13.1. Any prize, or portion
11 thereof remaining unpaid at the death of a prize winner, may
12 be paid to the estate of such deceased prize winner, or to
13 the trustee under a revocable living trust established by the
14 deceased prize winner as settlor, provided that a copy of
15 such a trust has been filed with the Department along with a
16 notarized letter of direction from the settlor and no written
17 notice of revocation has been received by the Department
18 prior to the settlor's death. Following such a settlor's
19 death and prior to any payment to such a successor trustee,
20 the Director shall obtain from the trustee and each trust
21 beneficiary a written agreement to indemnify and hold the
22 Department harmless with respect to any claims that may be
23 asserted against the Department arising from payment to or
24 through the trust. Notwithstanding any other provision of
25 this Section, any person pursuant to an appropriate judicial
26 order may be paid the prize to which a winner is entitled,
27 and all or part of any prize otherwise payable by State
28 warrant under this Section shall be withheld upon
29 certification to the State Comptroller from the Illinois
30 Department of Public Aid as provided in Section 10-17.5 of
31 The Illinois Public Aid Code. The Director shall be
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1 discharged of all further liability upon payment of a prize
2 pursuant to this Section.
3 (Source: P.A. 85-1224.)
4 (20 ILCS 1605/13.1 new)
5 Sec. 13.1. Assignment of prizes.
6 (a) The right of a person to receive payments due under
7 a prize that is paid in installments over time by the
8 Department may be voluntarily assigned, in whole or in part,
9 if the assignment is made to a person or entity designated
10 pursuant to an order of the circuit court located in the
11 county in which the assigning winner resides or in which the
12 Department's headquarters are located.
13 A court shall issue an order approving a voluntary
14 assignment and directing the Department to direct prize
15 payments in whole or in part to the assignee if, and only if,
16 all of the following conditions have been met:
17 (1) the assignment is in writing, executed by the
18 assignor, and by its terms, subject to the laws of this
19 State;
20 (2) the assignor provides a sworn affidavit
21 attesting that:
22 (A) the assigning winner is of sound mind, in
23 full command of his or her faculties, and not acting
24 under duress;
25 (B) the assigning winner has been advised
26 regarding the assignment by his or her own
27 independent legal counsel and has had the
28 opportunity to receive independent financial and tax
29 advice concerning the effects of the assignment;
30 (C) the assigning winner understands that he
31 or she will not receive the prize payments (or
32 portions thereof) for the years assigned;
33 (D) the assigning winner understands and
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1 agrees that, with regard to the assigned payments,
2 the State, the Department, and their officials and
3 employees will have no further liability or
4 responsibility to make the assigned payments to the
5 assignor;
6 (E) the assigning winner has been provided
7 with a one page written disclosure statement setting
8 forth (in bold type, 14 point or larger) the
9 payments being assigned (by amounts and payment
10 dates), the purchase price being paid, the rate of
11 discount to present value, assuming daily
12 compounding and funding on the contract date, and
13 the amount, if any, of any origination or closing
14 fees that will be charged to the assigning winner;
15 and
16 (F) the assigning winner was advised in
17 writing, at the time he or she signed the assignment
18 contract, that he or she had the right to cancel the
19 contract without any further obligation within 3
20 business days following the date on which the
21 contract was signed.
22 (b) A voluntary assignment shall not include or cover
23 payments or portions of payments that are subject to offset
24 on account of a defaulted or delinquent child support
25 obligation, unless appropriate provision is made in the order
26 to satisfy the obligations giving rise to the offset.
27 (c) The State, the Department, and their respective
28 officials and employees shall be discharged of all further
29 liability upon payment of a prize pursuant to an order
30 entered under this Section.
31 (d) The Department may establish a reasonable fee to
32 defray administrative expenses associated with assignments
33 made pursuant to this Section, including the cost to the
34 State or the Department of any processing fee that may be
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1 imposed by a private annuity provider. The fee amount shall
2 reflect the direct and indirect costs associated with
3 processing the assignments.
4 (e) Notwithstanding any other provision of this Section,
5 no prizewinner shall have the right to assign prize payments
6 upon:
7 (1) The issuance by the United States Internal
8 Revenue Service (IRS) of a technical rule letter, revenue
9 ruling, or other public ruling of the IRS in which the
10 IRS determines that, based upon the right of assignment
11 provided in this Act, a lottery prizewinner who does not
12 assign prize payments would be subject to an immediate
13 income tax liability for the value of the entire prize
14 rather than annual income tax liability for each
15 installment when paid.
16 (2) The issuance by a court of competent
17 jurisdiction of a published decision holding that, based
18 upon the right of assignment provided in this Section, a
19 lottery prizewinner who does not assign prize payments
20 pursuant to this Section would be subject to an immediate
21 income tax liability for the value of the entire prize
22 rather than annual income tax liability for each
23 installment when paid.
24 Upon receipt of a letter or ruling from the IRS or a
25 published decision of a court of competent jurisdiction, as
26 specified in item (1) or (2) of this subsection (e), the
27 Director shall immediately file a copy of that letter,
28 ruling, or published decision with the Secretary of State.
29 Immediately upon the filing by the Director of a letter,
30 ruling, or published decision with the Secretary of State, a
31 prizewinner shall be ineligible to assign a prize pursuant to
32 this Section.