Q: We are a financial club that invests in the stock market and also buys weekly lottery tickets. We all contribute and one member buys the tickets. It's wishful thinking, but what if the ticket wins $1 million? What are the payment basics and how can we protect ourselves against the ticket purchaser claiming the winnings for himself?
-- "Hopeful in Hialeah"
A: Let's first talk business law, and then we'll suggest some precautions to assure proper division of payment.
A lottery ticket is a unilateral contract (a promise for an act) in which the state offers to pay money if the offeree properly accepts by buying a winning ticket, properly submits a payment claim, and is otherwise eligible according to state law. There are currently 40 states with legal lotteries as well as some multistate games. Florida's governing statute is Chapter 24. Some of its important provisions are:
" Tickets must be personally bought in Florida from an authorized retailer by someone at least 18 years old, including U.S. citizens and resident aliens, but not Florida Lottery employees or relatives.
" Winners have 180 days from the drawing date to claim prizes.
" Winners have 60 days from the drawing date to choose a cash payment or payment in 30 annual installments with their money invested in U.S. government securities.
" IRS tax withholding for prizewinning U.S. citizens or resident aliens with a Social Security card is 25 percent for prizes over $5,000, 28 percent for prizes of $600 or more without a Social Security card, and 30 percent on all prize amounts for nonresident aliens.
" Lottery winners cannot remain anonymous. They must file claim forms for all winning tickets of $600 or more with name, mailing address, phone and Social Security number. Prizes up to $250,000 are paid at one of 11 district offices, and those worth more than $250,000 are claimed in Tallahassee.
Here are some tips to assure proper payment of the group's agreed-upon proceeds:
" A simple letter of agreement should be signed by all members of the group stating their intention to buy lottery tickets and specifying their individual contributions and shares of winnings. It should also spell out the procedure for buying tickets -- who, when, where and how, and state "the ticket holder acts as agent for the group."
" One member of the group should accompany the ticket buyer if possible. A copy of the ticket should promptly be made, the agreed percentage division written on it, and all participants should sign or initial. It will be an additional payment contract and the best evidence in the dvent of a problem.
" The back of tickets should be promptly filled in with the names or initials of group members and their percentages of participation.
" Although prizes up to $250,000 need not be claimed in person, the risk of mailing tickets remains with the player.
If mailed, send by registered U.S. mail or by insured FedEx or other bonded couriers with a claimed value equal to the award.
If at all possible, winnings should be claimed in person by the group, or as many members of the group as are available to travel to the paying office.
A related case: In Kaszuba v. Zientara, 506 NE2d 1 (IN. 1987), the parties were residents of Indiana, which didn't have a state lottery. Bernice Kaszuba worked in Illinois, which had a lottery, and she regularly bought tickets for Richard Zientara. He gave her the money for the ticket in question, and she bought it. However, when it was a $1,696,800 winner she refused to give it to him and claimed the winnings for herself. He successfully sued her in Indiana for the ticket and its proceeds. The court said, "No Indiana law prohibits the purchase of a lottery ticket in Illinois."