“An equitable assignment is any order, writing, or act by the assignor which makes an absolute appropriation of a chose in action or fund to the use of the assignee with the intention to transfer a present interest, although not amounting to a legal assignment. In such a scenario, the assignor must not retain any control over the fund, any authority to collect, or any power of revocation.”[i]  Courts verify the equitable nature of such assignments by inquiring whether the transfer was of such a character that the fund holder could safely pay or be compelled to pay, even though he/she is forbidden to do so by the assignor.[ii]

Thus, the intention of the assignor at the time of assignment is a major determinant in the equity analysis.  For an assignment to be valid, the assignor must have intended at the time of transfer to dispossess himself of an identified interest and vest indefeasible title in the assignee.[iii]  The intention of the assignor is the controlling factor.  The assignment of a future right is an equitable assignment rather than a legal assignment and equitable ownership vests in the assignee as soon as the assignor acquires the subject matter.[iv]
Assignment of a mere possibility is prohibited.  One can assign a contingent interest, expectancy, or thing not in existence but can potentially exist in the future.  Such an assignment takes effect when the subject matter assigned “comes into existence, provided it was fairly made, is supported by a sufficient consideration, and is not contrary to public policy.”[v]

In equity, a present assignment of money having the potential to be due but not yet due will operate on the fund as soon as it is acquired.  Thus, the assignment of a tax refund is not precluded on the ground that it is not property in existence at the time of the assignment.  In a bankruptcy proceeding, the assignment of a contingent right will be enforced since it is a proceeding in equity.  When the contingency is realized, the right to the property attaches as of the time of the assignment.[vi]  Further, the rights of an insured under an insurance policy payable to his/her estate may be assigned and the assignment operates to transfer to the assignee all rights in the insurance money payable in case of death.

Thus, in equity, the actual or potential existence of a debt or obligation is sufficient to be the subject of a valid and enforceable assignment.[vii]

[i] Purman Estate, 358 Pa. 187 (Pa. 1948)

[ii] Id.

[iii] In re Duty, 78 B.R. 111,115 (Bankr. E.D. Va. 1987)

[iv] Id.at 114

[v] Pollock v. Gandara (In re Gandara), 218 B.R. 808, 811 (Bankr. E.D. Va. 1997)

[vi] Kolb v. Berlin, 356 F.2d 269, 272 (5th Cir. 1966)

[vii] Summers v. Freishtat, 274 Md. 404, 407 (Md. 1975)