That's what I would do,take yearly payments that is. Eddie, If you die you die. If you get killed going to cash the winning ticket, you wont get it either.
Actually, if she was smart with her money, she could take the lump sum and invest it. By the end of the time that she'll collect yearly payments, she'd have made more from interest. But considering she has 9 maxed credit cards and over $8,000 of college debt the yearly payments are probably best. It varies from person to person.
But if she dies, the state does in deed keep the remainder.