How to Make a Check Payable to Someone Else

When you receive a check, you are the original payee. Endorsing a check legally authorizes transferring its value to another individual or entity. This guide clarifies the necessary steps and considerations for making a check payable to someone else.

Understanding Check Endorsement

Check endorsement is signing the back of a check by the payee, authorizing the transfer of its funds. This signature allows a financial institution to process it for deposit or cashing. The designated area for endorsement is typically found on the back of the check, usually within a box or near the left edge.

The original payee, or the person whose name is written on the “Pay to the Order of” line, must endorse the check. If a check is made out to multiple people using “and” (e.g., “John AND Jane Smith”), both individuals generally need to endorse it. If “or” is used (e.g., “John OR Jane Smith”), either party can endorse it.

Types of Endorsement

Several types of endorsements exist, each with a different purpose and level of security. Choosing the appropriate endorsement method is important for ensuring the check is handled as intended. The specific application of your signature and any accompanying instructions determines how the check can be processed.

A blank endorsement involves simply signing your name on the back of the check, exactly as it appears on the payee line. This type of endorsement makes the check payable to anyone who possesses it, similar to cash. While convenient for immediate deposit into your own account, it is the least secure option because if the check is lost or stolen, anyone can cash or deposit it.

To make a check payable to someone else, a special endorsement, also known as a third-party endorsement, is used. Write “Pay to the order of [New Payee’s Name]” on the back, followed by your signature. The check then becomes payable to the new named payee, who must endorse it before cashing or depositing. Not all banks accept third-party endorsed checks, and some may require the original payee to be present.

A restrictive endorsement limits what can be done with the check, typically to deposit only. Write “For Deposit Only” or “For Deposit Only to Account #[Account Number]” above your signature. This enhances security by ensuring funds can only be deposited into a specified account, preventing it from being cashed. Many financial institutions also require a restrictive endorsement, such as “For mobile deposit only,” for mobile banking app deposits.

Protecting Your Endorsed Check

Proper handling of an endorsed check is important to safeguard funds and ensure a smooth transaction. Endorse the check only when you are ready to deposit or transfer it. Endorsing prematurely, especially with a blank endorsement, can expose it to potential loss or theft, as it can be treated like cash by anyone who possesses it.

When using a special endorsement, verify the new payee’s full and correct name. This ensures no discrepancies that could cause delays or issues at the bank. Keep a personal record of the check’s details, including the check number, amount, date, original payee, and the new payee, for financial tracking.

Once endorsed and transferred, the new payee should deposit or cash the check promptly. Checks generally have a validity period, often around six months, after which banks may not accept them. Maintain secure possession of the endorsed check until it is processed to prevent unauthorized access or fraudulent activity.