Why You Should Be Careful Before Signing an Assignment

What Is an Assignment Agreement?

An assignment agreement is a legal contract in which one party (the assignor) transfers their right to claim or receive something to another party (the assignee). In the context of excess proceeds, the right being transferred is the right to claim and collect surplus funds from a government entity. Once you sign a valid assignment, the assignee — not you — files the claim, receives the funds, and keeps whatever portion the contract specifies.

Assignments are not inherently illegitimate. Many legitimate businesses and law firms use assignment agreements as part of their service model. But they are also one of the most common vehicles for predatory behavior in the excess proceeds industry. A poorly understood assignment can cost a claimant tens of thousands of dollars — or the entirety of their surplus.

What Rights You Are Transferring

When you sign an assignment agreement, you are typically transferring:

• The right to file the claim in your name (or in the assignee's name, depending on the agreement)
• The right to receive and deposit the funds from the county or court
• The right to negotiate, settle, or litigate the claim
• In some cases, the ownership interest in the funds themselves

Critically, once the funds are released to the assignee, they are not required to pay you until they have deducted their fee — and their fee is defined by the agreement you signed. If the agreement gives the assignee 40 or 50 percent of the recovery, that is what they keep.

Red Flags to Watch For

Before signing any assignment agreement, look carefully for these warning signs:

• Excessive percentage fees. Fees of 30%, 40%, or 50% of the recovery are common in some segments of this industry. Compare what you would receive by filing the claim yourself — sometimes a simple claim can be filed directly with the county at little to no cost.
• Upfront fees. Be extremely cautious about any company that demands payment before any funds are recovered. Legitimate operators typically work on contingency — they are paid only if and when funds are recovered.
• Permanent assignment of rights. Some agreements assign your rights permanently, meaning you cannot revoke the assignment even if you later find a better option or decide to handle the claim yourself.
• No clear fee disclosure. The agreement should clearly state exactly what percentage or amount the company will retain. If the fee structure is vague, complicated, or hidden, do not sign.
• High-pressure sales tactics. Anyone who insists you must sign immediately or the opportunity will disappear is not acting in your best interest. Surplus fund claims are important, but they are rarely so urgent that you cannot take a day to review an agreement.
• No license or credentials. Ask whether the company is a licensed attorney, a licensed private investigator, or holds any professional credential relevant to claims recovery. In many states, certain types of claim recovery work may require a license.

Questions to Ask Before Signing

1. What percentage of the recovery will the company keep?
2. Are there any upfront fees or costs I must pay regardless of outcome?
3. Can I cancel the agreement if I change my mind? When and how?
4. Is the assignee a licensed attorney? If not, what is their legal authority to file claims on my behalf?
5. What happens if the claim is denied? Am I still obligated?
6. Can I file this claim myself? If so, what would it cost me in filing fees and time?
7. May I have a copy of the agreement to review before signing, and may I have an attorney review it?

When an Assignment May Make Sense

Assignments are not always a bad deal. If the claim is complex — involving multiple heirs, a contested probate, or litigation — a professional claims service or attorney may add real value that justifies their fee. The key is to understand exactly what you are agreeing to, compare your options, and make an informed decision. Never sign under pressure.