You guys do know that if you choose annuity, and you die during that time, they don't continue to pay out.
For that reason I would go with the payout. You would all probably end up poor the way you are talking about it.
I would probably end up investing most of it. I don't really see the need to be so flashy. I would pay off peoples loans but that wouldn't be that much, 2 million max (and that is a stretch). I would start a scholarship and donate some money to charities and to causes that I believe in. I wouldn't want some ridiculous mansion, I would just like to live comfortably.