The right of any person to a prize shall not be assignable, except that the payment of any prize may be assigned, in whole or in part, as provided by Section 8880.326 and this section, under any of the following circumstances: (a) An assignment executed by the prizewinner on a form approved by, and filed with, the commission during the prizewinnerâs lifetime in accordance with regulations adopted by the commission, to a trust that by its terms is revocable, and that is established by the prizewinner for the benefit of the prizewinner as a beneficiary and governed by the laws of the state. (b) An appropriate judicial order appointing a conservator or a guardian for the protection of the prizewinner, or for adjudicating rights to, or ownership of, the prize. (c) An assignment, as collateral, to a person to secure a loan pursuant to Division 9 (commencing with Section 9101) of the Commercial Code. The assignment as collateral of the right to receive payment of a prize shall be subject to all of the following: (1) All security agreements, rights of the prizewinner, and rights of the secured creditor shall be determined pursuant to the laws of the state. (2) In the event of a default under the loan or security agreement, the secured creditorâs rights shall be limited to receiving the regular payments made by the lottery, based on the prizewinnerâs right to receive a regular prize payment until the obligation has been paid in full or the prize has been paid in full, whichever occurs first. Notwithstanding Division 9 (commencing with Section 9101) of the Commercial Code, the secured creditor shall not have the right to sell or assign the prizewinnerâs rights to payments to itself or to any other person. This section shall not limit the secured creditorâs right to sell, assign, or transfer the obligation of the debtor and related security interest to a third party. (3) The prizewinner and secured creditor may agree, and may jointly instruct the lottery, to directly deposit all prizewinning payments into an account maintained by the prizewinner at a federally insured financial institution located within the state. This account may be subject to the secured creditorâs lien. Upon receipt of these instructions, the lottery shall continue to deposit all payments due to the prizewinner into the account until the lottery receives notification from both the secured creditor and the prizewinner that the payments are to be made to an account maintained at another bank, or that the secured creditor releases or terminates the security interest in the prizewinnerâs payments. (4) (A) The prizewinner, pursuant to an order of the court obtained in compliance with subdivision (d), may direct the lottery to make the prize payments, in whole or in part, directly to the secured creditor. A direction to the lottery to make a prize payment to a secured creditor shall not, in itself, constitute an assignment of the prize payment to the secured creditor. (B) For purposes of this paragraph and subdivision (d), âassigneeâ and âsecured creditorâ are synonymous, and âassignmentâ or âprize paymentâ means the payment that is directed to be paid to the secured creditor. (5) For purposes of perfecting the security interest of the secured creditor, the right of the prizewinner to receive payments is deemed to be a contract right that is perfected by the filing of a financing statement with the office of the Secretary of State. (6) A copy of the security agreement, an endorsed copy of the financing statement, and the joint instruction to deposit the prizewinnerâs payments directly into an account, if any, at the financial institution shall be filed with the lottery. Notwithstanding the security interest granted a creditor, all lottery payments shall be made payable directly to the prizewinner, except as follows: (A) Payments sent directly to the financial institution designated pursuant to paragraph (3). (B) In the event of a default un
‹ Prev All California sections Next ›
Lexace provides legal information, not legal advice, and no attorney–client relationship is created. Statute text is provided for general information and may not reflect the most recent amendments; verify against the official state code.