Some info on assignment:
http://www.williamsmullen.com/news/articles_detail/019.htm
Assignment of Lottery Proceeds
An individual who wins a major lottery prize often is presented with more wealth and income than he or she has theretofore experienced. The lottery winner may be eager to share the wealth (and the income tax burden) with other family members or friends. Consequently, the winner may consider assigning some or all of the proceeds to one or more such persons. Whether an assignment of all or part of a lottery ticket is effective to transfer the income tax liability on any winnings depends on when the transfer is made. If the lottery ticket is assigned, in whole or in part, before it becomes a winning ticket, any subsequent winnings are taxed to the assignee or donee.20 If the winning lottery ticket is assigned after it becomes a winning ticket, the proceeds are taxed to the assignor and not the assignee or donee.
Example: Bernard purchases a lottery ticket and then assigns a one-half interest in the ticket to his girlfriend, Marlene, by executing an assignment agreement. The next day, the ticket is selected as the winning ticket in the lottery. Bernard recognizes one-half of the income from the lottery, while Marlene recognizes the other half.21
The cases involving an assignment of a lottery ticket prior to winning largely turn on the facts surrounding the assignment, and the taxpayer's ability to prove that there was an intent to share the winnings at the time the ticket was purchased.22 It is difficult, if not impossible, to overstate the high burden on taxpayers to prove a pre-existing agreement to share lottery winnings. The absence of a written agreement, while not fatal, adds considerably to that burden. In the absence of a written agreement, proof of a sharing agreement may be less difficult where there is a regular pattern of buying tickets or an "office pool" arrangement.
If a group of taxpayers enter into an agreement to purchase lottery tickets and to share the winnings, they are required to include only their share of the prize in income—even if the agreement is unenforceable under state law.23 If, however, the person who collects the prize fails to honor the unenforceable agreement, the amount retained is included in that person's income.24
Example: Sam, Simon, and Seymour live in North Carolina and regularly travel to Virginia to purchase lottery tickets. They agree that they will split the lottery prize equally. Seymour travels to Virginia and purchases a ticket that turns out to be a winner. Despite their agreement, Seymour decides not to share the lump-sum lottery prize with Sam and Simon. Sam and Simon sue Seymour, but the North Carolina court declares that because lotteries are illegal in that state their agreement is unenforceable. Seymour is required to include all of the lump-sum prize in income in the year of winning the lottery.25
As discussed above, if the lottery ticket is assigned, in whole or in part, after it is a winning ticket, the assignment will not be effective for the purpose of shifting any of the income tax liability. The purported assignor will be responsible for the entire income tax liability associated with the winnings.
Example: Wade wins the lottery; his prize is payable in 20 annual installments. Wade had no preexisting agreement to assign, transfer, or share any part of his lottery prize with any other person. After winning the lottery, Wade decides to share his good fortune with his three friends, Jane, Mary, and Beth. Wade plans to make gifts, evidenced by an "irrevocable declaration of gift," of $5,000 per year to Jane, Mary, and Beth for the next 19 years. The "irrevocable declaration of gift," an unequivocal, unconditional written instrument, binding under local law, which evidences the transfer of a portion of the lottery proceeds to Jane, Mary, and Beth, is not effective to transfer the income tax liability to Jane, Mary, and Beth. Wade must include each lottery prize installment as income, including any portion distributable to Jane, Mary, and Beth, for the tax year in which each installment is actually or constructively received.26