How to Sign Over a Check to Someone Else

Signing over a check means transferring the right to receive funds from the original payee to a third party. This process allows the initial recipient to designate another individual or entity as the new payee, enabling them to cash or deposit the check. It serves as a method of reassigning the payment without requiring the funds to first pass through the original payee’s bank account. This can be a convenient way to settle a debt or make a gift.

Understanding Endorsement Eligibility

For a check to be eligible for third-party endorsement, the original payee must be the one to initiate the transfer. They are the only party with the legal authority to sign over the check. The type of check can also influence its transferability; for instance, while personal and payroll checks are often transferable, certain government-issued checks or cashier’s checks may have restrictions or be non-transferable due to specific regulations.

When a check is made out to multiple payees, the wording on the “Pay to the Order of” line dictates who must endorse it. If the names are joined by “and,” such as “John Doe AND Jane Doe,” both individuals typically need to endorse the check. Conversely, if the names are joined by “or,” like “John Doe OR Jane Doe,” either individual can endorse the check independently.

The Endorsement Steps

To sign over a check, locate the endorsement area on the back, usually at the top, marked with a line or box that says “Endorse Check Here.” The original payee must sign their name exactly as it appears on the front of the check. This signature authorizes the transfer of the check.

Immediately below the original payee’s signature, write “Pay to the Order of” followed by the full name of the new payee. This specific instruction, known as a special endorsement, clearly directs the payment to the designated third party. Use a permanent pen and ensure all writing is legible. The new payee will then need to endorse the check when they deposit or cash it, by signing their name below the special endorsement.

Key Considerations for Success

While legally permissible, banks often have their own internal policies regarding the acceptance of third-party checks. Many financial institutions may discourage or outright refuse to accept these checks due to the heightened risk of fraud. It is always advisable for the new payee to contact their bank, or the original payee’s bank, beforehand to confirm their policy on third-party endorsements.

The original payee may still bear responsibility if the check does not clear, even after being signed over. This contingent liability arises because their endorsement guarantees the validity of the check at the time of transfer. Therefore, ensuring the check is legitimate and that the endorsement is clear and unambiguous is crucial.

Certain scenarios can complicate third-party endorsements. For example, checks marked “for deposit only” or those with restrictive endorsements are generally not transferable to a third party. Banks may also place extended holds on funds from third-party checks to verify the check’s authenticity and reduce fraud risk.