How to Sign Over a Personal Check to Another Person

When you receive a personal check, you typically deposit or cash it. Sometimes, however, you may find yourself in a situation where you need to transfer the right to that check’s funds to another individual. This process, known as signing over a check, involves a specific type of endorsement that legally transfers ownership from the original recipient to a new one.

Understanding Check Endorsement

An endorsement refers to the signature and any accompanying instructions placed on the back of the check. It serves as a legal authorization from the original recipient, known as the payee, to transfer the check’s funds.

When you sign over a check, you instruct your bank to pay the funds to someone else, who becomes the new payee. This transfer of ownership is typically achieved through a “special endorsement.” A special endorsement specifically names the new individual or entity to whom the check’s funds are being transferred. This differs from a blank endorsement, which only requires the payee’s signature.

Executing the Endorsement

Signing over a personal check involves a precise process on the back of the check. Turn the check over and locate the designated endorsement area, which is typically found on the back, usually on the left side. This area often includes lines or a box labeled “Endorse Check Here.”

The original payee must then sign their name exactly as it appears on the “Pay to the order of” line on the front of the check. This signature should be placed clearly within the designated endorsement area, using a pen with permanent ink like blue or black.

Directly above the original payee’s signature, or immediately below it depending on the check’s layout, the original payee must write the special endorsement phrase: “Pay to the order of [New Payee’s Name].” It is important to clearly write the full legal name of the new recipient in this space.

Once the original payee has completed these steps, the check becomes a third-party check. For the new payee to claim the funds, they must also endorse the check by signing their own name in the endorsement area, typically below the special endorsement phrase.

Special Endorsement Situations

When a check is made out to multiple payees, the conjunction used between their names determines the endorsement requirements. If the names are joined by “and” (e.g., “John AND Jane Doe”), all listed payees must endorse the check to transfer ownership. If the check uses “or” (e.g., “John OR Jane Doe”), either payee can endorse it, but for signing over to a third party, it is generally prudent for both to endorse if both are involved in the transaction.

If the payee’s name is misspelled on the front of the check, it is important to endorse the check with both the misspelled name as it appears and then their correct legal name directly below it. This dual endorsement clarifies the identity of the intended recipient to the financial institution. While many banks will accept minor misspellings, this method helps prevent potential processing delays or rejections.

Checks made payable to a business also have distinct endorsement rules. An authorized signatory of the business must endorse the check on behalf of the company, often including their title and the business name. Businesses typically have more stringent internal policies regarding check handling, and signing over a business check to an individual is generally not recommended or permitted due to internal controls and fraud prevention measures.

It is also important to remember that while the general principles of endorsement are standard, individual banks may have specific policies regarding third-party checks. Some financial institutions may have stricter requirements or may not accept third-party checks at all due to fraud concerns.

It is always advisable for the new payee to contact their bank beforehand to confirm their acceptance policy for third-party checks and inquire about any additional requirements, such as the original payee needing to be present.