How to Sign a Check Back to Another Person
Transfer a check's payment to someone else with confidence. This guide explains how to properly endorse a check and important legal considerations.
A check is a written order directing a bank to pay a specific sum of money from one account to another. It is a transferable financial instrument, allowing its ownership to be moved from the original recipient to another party. This process enables funds to be directed to a different individual or entity than the one originally named on the check.
Understanding Check Endorsement
A check endorsement is a signature on the back of a check that serves as a legal instruction for its payment. This signature transfers the rights to the funds from the original payee to another party or authorizes its deposit. The endorsement ensures the financial institution processes the check according to the payee’s wishes. It acts as a legal mechanism to authenticate the transfer of funds.
The original payee is the person or entity to whom the check is initially written. When this person signs the check on the back, they become the endorser, signifying their intent to transfer the check. The individual or entity to whom the check is being transferred, and who will ultimately receive the funds, is known as the endorsee.
How to Endorse a Check to Another Person
To endorse a check for transfer to another individual, use a special endorsement. This method explicitly names the new payee, ensuring the funds go only to that specific person. Place the endorsement on the back of the check, typically in the top left section, within the designated endorsement area, which is usually marked with a line or “Endorse Here.”
Begin the special endorsement by writing “Pay to the order of” followed by the full name of the new payee. For example, if transferring the check to John Doe, write “Pay to the order of John Doe.” Immediately below this statement, the original payee must sign their name exactly as it appears on the front of the check. This combined instruction and signature legally directs the bank to pay the specified individual.
This differs from a blank endorsement, which involves only the original payee’s signature and makes the check payable to anyone who possesses it. A restrictive endorsement, such as “For Deposit Only,” limits how the check can be used. For transferring a check to another person, the special endorsement is the appropriate and secure method, providing clear instructions to the financial institution and protecting against unauthorized cashing.
Key Considerations for Endorsing Checks
Banks may decline to accept a third-party endorsed check for several reasons, including internal policies or fraud concerns. Some financial institutions have strict rules against cashing or depositing checks endorsed multiple times or to a non-account holder. An unclear or incomplete endorsement, such as a misspelled name or missing signature, can also lead to rejection. Checks that are stale-dated, meaning presented for payment well after their issue date (often 90 or 180 days), may also be refused.
The new payee attempting to cash or deposit a third-party check will likely need to provide strong identification. This helps the bank verify their identity and ensure they are the legitimate endorsee named on the check. Without proper identification, the bank may refuse the transaction, citing security protocols. The financial institution aims to protect both its customers and itself from potential financial crime.
When you endorse a check to another person, you remain secondarily liable if the check is not honored by the issuing bank. This means if the check bounces due to insufficient funds or a stop payment order, the bank may seek to recover funds from you as the endorser. Therefore, it is important to only endorse checks to individuals you trust. Transferring checks for large sums or to unfamiliar recipients may not be advisable due to this potential liability and increased risk.