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In addition, an annuity contract will usually provide the owner
with specific rights during the period the agreement remains in
force. The contract can generally be alienated and assigned, and
the owner can elect to name a beneficiary of the contract.
In contrast, the estate emphasizes that a LOTTO prize is the
result of a $1 wager, not a substantial invested premium. The
annual installments are derived from the income and investments
of the State, not from the corpus supplied by the purchaser. The
winner’s age, gender, or health play no role in determining the
benefit level. Additionally, the winner lacks any ability to
make choices regarding payment commencement, amount, duration, or
termination, and cannot assign the installments or elect a
beneficiary to receive installments upon the winner’s death.
Having thus attempted to demonstrate that the lottery prize
does not resemble a typical annuity valued under actuarial
tables, the estate then goes on to cite a variety of assets
yielding payment streams which, according to the estate, are
valued not under section 7520 but rather by taking into account
the unique characteristics of and restrictions on the asset. The
implicit invitation is that we determine that the installments
here are more analogous to these alternatives and that similar,
item-specific fair market principles should be used in the
prize’s valuation.
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