How to Sign Checks Over to Someone Else

Checks are a common method for transferring funds, serving as a written order instructing a bank to pay money from one account to another. While typically deposited or cashed, checks can be transferred to someone else through endorsement. This article explains how to properly sign a check over to another individual and explores important considerations.

Understanding Check Endorsement

Endorsing a check involves signing its back to authorize its negotiation or transfer. Different types of endorsements serve various purposes. The simplest form is a blank endorsement, where the payee signs their name exactly as it appears on the check. This makes the check a “bearer instrument,” meaning anyone who possesses it can cash or deposit it, offering little security.

A restrictive endorsement limits how a check can be used, typically by writing “For Deposit Only” with the payee’s signature. This ensures funds are deposited into a specific account, providing greater security by preventing unauthorized cashing. For transferring a check to another person, a special endorsement (also known as a third-party or full endorsement) is used. This explicitly directs payment to a new payee by writing “Pay to the order of [New Payee’s Name]” followed by the original payee’s signature. This action legally transfers ownership of the check.

Steps for Third-Party Endorsement

Signing a check over to another person requires a precise method to ensure its validity. Locate the endorsement area on the back of the check, usually a designated blank space or a line marked “Endorse Here.” The original payee must sign their name in this area exactly as it appears on the front of the check.

Directly below the original payee’s signature, they must clearly write “Pay to the order of [New Payee’s Full Name].” This instruction designates the new recipient of the funds. Once the original payee completes these steps, the check transfers to the new payee. The new payee will then need to endorse the check, usually with a blank endorsement (their signature), when ready to deposit or cash it.

Bank Acceptance and Considerations

While legally permissible, banks often have specific policies regarding the acceptance of third-party endorsed checks due to increased risks. Many financial institutions may discourage or even refuse to process these checks because they present a higher potential for fraud, forgery, or unauthorized endorsement. Verifying the legitimacy of multiple endorsements can be challenging for banks, leading to stricter scrutiny.

It is advisable for the new payee to contact their bank or the issuing bank of the check beforehand to confirm their policy on third-party checks. Some banks may require both the original payee and the new payee to be present at the bank with valid identification to complete the transaction. If the check is accepted, banks might place an extended hold on the funds for several days to allow for verification.

Other Options for Transferring Funds

If transferring a check via third-party endorsement proves difficult or is not accepted, several alternative methods exist for transferring funds. A common and simpler approach is for the original payee to deposit the check into their own bank account. Once funds are cleared and available, the original payee can then write a new personal check to the intended recipient.

Modern digital payment methods offer more immediate and secure ways to transfer money. Direct bank transfers, initiated through online banking platforms, allow funds to be moved electronically between accounts. Peer-to-peer (P2P) payment applications, such as Zelle, Venmo, or PayPal, provide convenient ways to send money directly to another individual using their phone number or email address. Wire transfers are another option, typically used for larger sums or international transfers, though they often involve higher fees. These alternatives can circumvent the complexities associated with third-party checks.