Question

Shelby, who is disabled, is entitled to $1,000 per month from the State of California in welfare benefits to support her minor children. Shelby wants a new Tesla and the monthly payment will be about $1,000 per month for 60 months. She assigns her next 60 months of welfare benefits to the Tesla dealer to pay for the new car. When the dealer sends notice of the assignment to the State of California, it is advised that the assignment is not valid.

1. The dealer is not entitled to anything from the State because public benefits cannot be assigned.

2. The dealer is entitled to the future payments because the right to money is always assignable.

3. The dealer is entitled to the future payments because the assignment was in writing.

4. Because Shelby could not afford a new Tesla, her purchase contract is void.

Answer 1

option (1) i.e. "the dealer is not entitled to anything from the State because public benefits cannot be assigned" is the correct answer.

Participant's rights and interest under a welfare plan may not be assigned or transferred.

In case of any Participant's death, payment, if any, under the Plan shall be made to the Participant's surviving spouse or designated beneficiary in accordance with the provisions of the Plan.

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