By choosing annual payouts, (at least in Ohio you have that choice, discounted cash payment, or annual, don't know about Texas) you shouldn't forfeit the unpaid dividends if you die.
At least in Ohio, they continue to pay out to your heirs until the full amount is paid.
No, to me it sounded like he had run up debts that were going to eat up the cash flow.
My guess would be he went to one of these outfits that pay you cash up front for future guaranteed benefits. They decide what level of return they want on their money then they pay you the current value of the future benefits. A simple example would be that you are going to get $1 million dollars over the next few years. If they want to earn 10% of their money they give you $900,000 cash now and collect your money over the term of your windfall. It's a great deal more complicated that than, but that's the basis of how it's done. It's a pretty common practice, and if done fairly a good deal for both parties, but it's seldom done fairly because the golden rule comes into play, "He who has the gold makes the rules", and the person that can't or doesn't want to wait for the payout over time usually is pretty desperate to get their hands on the cash.
Sounds like his wife will have the good sense to tell these hangers on where the door is.
"Sounds like Texas doesn't pay out to survivors of deceased winners. Now THAT should be criminal."
Texas DOES continue to make the payments to the winner's estate.