New Jersey § 5:9-13

§ 5:9-13.

a. The right of any person to a prize drawn shall not be assignable, except as permitted by this section. b. The payment of any prize drawn may be paid to the estate of a deceased prize winner upon receipt by the State Lottery of a certified copy of an order appointing an executor

or an administrator. c. Any person may be assigned and paid the prize to which the winner is entitled pursuant to a judicial order of the New Jersey Superior Court or a federal court having

jurisdiction over property located in this State provided that the order pertains

to claims of ownership in the prize drawn, division of marital property in divorce

actions, bankruptcy, child support, appointment of a guardian or conservator, or distribution

of an estate. d. Any person may be assigned and paid a prize to which the winner is entitled pursuant

to a judicial order of the New Jersey Superior Court or a federal court having jurisdiction

over property located in this State provided that the order contains at least the

following findings: (1) the full legal name, address, social security number or taxpayer identification

number and, if applicable, resident alien number of the winner; (2) the full legal name, address, social security number or taxpayer identification

number and, if applicable, resident alien number of the assignee; (3) the date on which the winner won the prize; (4) the date on which the winner claimed the prize; (5) the gross amount of the prize drawn before application of withholding taxes; (6) the gross amount of payments to be made to the winner by the State Lottery before

application of withholding taxes; (7) the dates of the payments to be assigned and the amount of the specific payments

to be assigned on each date; (8) the identity of the winner's spouse, if any, and the interest of the spouse in

the prize; (9) the identity of any other co-owner, claimant or lienholder and the amount of the

interests, liens, security interests, prior assignments or offsets asserted by such

party; (10) that the interest rate or discount rate, as applicable, and all fees and costs

and other material terms relating to the assignment are expressly and clearly included

in all material documents and in all documents that include any obligations of the

prize winner; (11) that the interest rate or discount rate, as applicable, associated with the assignment

does not indicate overreaching or exploitation, does not exceed current usury rates,

and does not violate any laws of usury of this State; (12) that the winner has reviewed and understands the terms of the assignment; (13) that the winner understands that the winner will not receive the prize payments,

or portions thereof, for the years assigned; (14) that the winner has agreed to the assignment of the winner's own free will without

undue influence or duress; (15) that the winner has retained, and consulted with, independent legal counsel who

has advised the winner of the winner's legal rights and obligations; (16) that the winner has retained, and consulted with, an independent tax advisor

concerning the tax consequences of the assignment; (17) that the winner does not seek assignment for purposes of evading creditors, judgments

or obligations for child support; and (18) that the winner has certified that the winner does not have a child support obligation,

or if the winner has a child support obligation, that no arrearage is due and that

the winner is not obligated to repay any public assistance benefits. e. Before a winner is legally bound, by agreement, contract or otherwise, and prior

to the issuance of an order pursuant to subsection d. of this section, the assignee

shall provide the winner with all material documents which shall be binding on the

assignor, including documents evidencing obligations of the winner, and a written

notice recommending that the winner obtain independent counsel before signing any

document which shall be binding on the assignor. All documents shall include a notice of the assignor's right to cancel the agreement

which shall be located in immediate proximity to all spaces reserved for the signature

of the winner in bold-faced type of at least 10 points and which shall provide as

follows: “You have the right to cancel this assignment without any cost to you until midnight

three business days after the day on which you have signed an agreement to assign

all or a portion of your prize. Cancellation occurs when you give notice by regular first class mail, postage prepaid,

to the assignee at the address listed at the top of the first page of this document

that you wish to cancel the assignment. Notice is deemed given when deposited in a mailbox.” f. If the State Lottery determines that a judicial order granting an assignment, issued

pursuant to subsection d. of this section, is complete and correct in all respects,

the State Lottery shall, not later than 10 days after receiving a true and correct

copy of the filed judicial order, send the winner and the assignee written confirmation

of receipt of the court-ordered assignment and of the State Lottery's intent to rely

thereon in making future payments to the assignee named in the order. The State Lottery shall, thereafter, make all payments in accordance with the judicial

order. No change in the terms of any assignment shall be effective unless made pursuant

to a subsequent judicial order. g. The State Lottery may impose a reasonable fee on an assignor to defray any direct

or indirect administrative expenses associated with an assignment. h. A winner shall not be permitted to assign the last two annual prize payments. i. The State Lottery and the State are not parties to assignment proceedings, except

that, the State may intervene as necessary to protect the State's interest in monies

owed to the State. j. The State Lottery and the State shall comply with, and rely upon, a judicial order

in distributing payments subject to that order. k. A winner may pledge or grant a security interest in all or part of a prize as collateral

for repayment of a loan pursuant to a judicial order containing the findings required

by subsection d. of this section which the court deems relevant to the pledge or grant. l . Except where inconsistent with the provisions of this section, the New Jersey consumer

fraud act, P.L.1960, c. 39 ( C.56:8-1 et seq. ), shall apply to all transactions under this section. m. The court shall cease to approve assignments pursuant to subsection d. of this

section if: (1) the United States Internal Revenue Service issues a technical rule letter, revenue

ruling, or other public ruling in which it is determined that because of the right

of assignment provided by subsection d. of this section, prizewinners who do not exercise

the right to assign prize payments would be subject to an immediate income tax liability

for the value of the entire prize rather than annual income tax liability for each

installment when received; or (2) a court of competent jurisdiction issues a published decision holding that because

of the right of assignment provided by subsection d. of this section, prizewinners

who do not exercise the right to assign prize payments would be subject to an immediate

income tax liability for the value of the entire prize rather than annual income tax

liability for each installment when received. n. Upon receipt, the director shall immediately file a copy of a letter or ruling

of the United States Internal Revenue Service or a published decision of a court of

competent jurisdiction, described in subsection m. of this section, with the Secretary

of State. No assignment shall be approved pursuant to subsection d. of this section after

the date of such filing. o . Notwithstanding the provisions of this section, any lottery prize assignment or

loan transaction which has been approved by a New Jersey Superior Court pursuant to

section 13 of P.L.1970, c. 13 ( C.5:9-13 ) on or before May 15, 1998, regardless of whether such an order has been or is the

subject of an appeal, shall, upon joint written agreement of the parties, be deemed

a binding assignment or transaction and shall be honored by the Division of the State

Lottery. p. No change in the terms of any assignment shall be effective unless made pursuant

to a subsequent court order under this section. q. A voluntary assignment shall not include or cover payments, or portions of payments,

that are subject to the offset pursuant to P.L.1991, c. 384 ( C.5:9-13.1 et seq. ), P.L.1997, c. 306 ( C.5:9-13.10 et seq. ), or any other law unless appropriate provisions are made to satisfy the obligations

giving rise to the offset. r. No lottery assignee shall directly or indirectly recommend or facilitate the hiring

of any lawyer or accountant to assist the assignor in determining the appropriateness

of the proposed assignment. Further, the assignee shall not offer prior to the closing tax or investment advice. s. The director , commissioners and employees of the Division of the State Lottery shall be discharged of any and all liability upon payment of a prize drawn pursuant to this section.