An equitable assignment of benefits, in the context of a contract (such as an insurance policy), serves as a mechanism for a third party to establish legal standing in the absence of a written assignment. Unlike a written assignment, which is typically governed by statute or contract language, an equitable assignment arises from legal precedent.

In general, any instruction, document, or act that vests in one party the right to receive funds arguably due another party may operate as an equitable assignment. McClure v. Century Estates, Inc., 96 Fla. 568, 120 So. 4, 10 (1928). “No particular words or form of instrument is necessary to effect an equitable assignment[,] and any language, however informal, which shows an intention on one side to assign a right or chose in action and an intention on the other to receive, if there is a valuable consideration, will operate as an effective equitable assignment.” [emphasis added] Giles v. Sun Bank, N.A., 450 So.2d 258, 260 (Fla. 5th DCA 1984); See also WM Specialty Mortg., LLC v. Salomon, 874 So. 2d 680 (Fla. 4th DCA 2004). The true test is “whether the debtor would be justified in paying the debt to the person claiming as assignee.” McClure v. Century Estates at 588. Any words or transactions showing an intention on one side to assign and on the other to receive, if supported by a valuable consideration, will operate as an effective equitable assignment. Asphalt Paving, Inc. v. Ulery, 149 So. 2d 370, 375 (Fla. 1st DCA 1963).

Accordingly, the two essential elements for the creation of an equitable assignment are: (1) intention; and (2) consideration. While a third party (such as one claiming an equitable assignment) generally cannot challenge whether consideration was provided during contract formation, they may question whether the assignor intended to assign their benefits under the insurance policy to another party. For example, in QBE Specialty, the court determined that the act of performing a service does not give rise to an equitable assignment absent evidence the insured intended to assign their rights. QBE Specialty Ins. Co. v. United Reconstruction Group, Inc., 325 So. 3d 57, 61 (Fla. 4th DCA 2021. This distinction is significant. While the Florida Supreme Court in McClure included an “act” as one way to effectuate an equitable assignment, the Fourth District in QBE clarified that not every act—such as providing a service—is sufficient to establish an equitable assignment without supporting evidence of intent.