How to Properly Cash a Two-Party Check

Cashing a two-party check involves specific steps to ensure all listed payees can access the funds. A two-party check is a financial instrument made payable to two or more individuals or entities. These checks are commonly issued for joint payments, such as insurance payouts, shared tax refunds, or proceeds from property sales.

Proper Endorsement for Two-Party Checks

Proper endorsement is the first step when handling a two-party check. The wording on the payee line dictates how many signatures are necessary. If the check is made out to “Payee A AND Payee B,” or uses a symbol like “&” or “+,” both individuals must endorse the check. Conversely, if the check states “Payee A OR Payee B,” either Payee A or Payee B can endorse the check individually.

Each required payee should sign their name on the back of the check, typically within the designated “Endorse Here” box. It is important to sign exactly as the name appears on the front of the check to avoid processing delays. Additional information, such as “for deposit only” or an account number, may be required, especially when depositing the check into a specific account.

Methods for Cashing Your Check

After all necessary endorsements are complete, you can proceed with cashing the check. One common option is to visit your bank or credit union, where you can often deposit the check directly into an account or receive cash. You will typically need to present valid identification, such as a driver’s license or state-issued ID, and all listed payees may need to be present.

Another method is to visit the bank that issued the check. Even if you do not have an account there, they may cash the check, but they often charge a fee, which could be a flat amount, for instance, $8, or a percentage, such as 1% of the check amount. Identification is required, and all payees may need to be present.

Check cashing services also provide this service, generally for a fee ranging from 1% to 4% of the check amount, with minimum fees often around $5. They will also require valid identification and usually the presence of all payees. Endorsing the check to a third party by writing “Pay to the order of [Third Party’s Name]” below your signature is an option, but this carries risks and may not be accepted by all institutions.

Navigating Unique Cashing Situations

Unique circumstances can alter the standard process for cashing a two-party check. If one of the payees is unavailable or deceased, the process becomes more complex. A power of attorney (POA) automatically terminates upon the death of the individual who granted it, meaning a POA cannot be used to cash a check for a deceased person.

In such cases, the check becomes part of the deceased person’s estate, and only the appointed executor or administrator of the estate can legally endorse and deposit the check into an estate account. This requires official legal documentation, such as a certified death certificate and letters testamentary or letters of administration from a probate court.

Checks made out to a business and an individual, or two businesses, require specific handling. An authorized representative of the business must endorse the check by signing the business name, their own name, and their title, such as “Owner” or “Accountant”. For out-of-state payees, mailing the check for endorsement or requiring notarization of signatures may be necessary, depending on the cashing institution’s policies.