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Home >> Checks/Money Orders >> Checks You Received
Depositing Checks for Relatives
My parents received a check from their insurance company that was payable to my mother, father, and the lender. I understand that I will have to pay taxes on it, but is there any way that I can deposit the check for them?
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 There is no reason you'd have to pay taxes if you deposit the check for your parents, unless somehow the funds become income for you. However, you should consult a tax expert if you have questions about your tax liability.
As for the check itself, it appears that your parents suffered an insured loss to their home, a vehicle or other property that was security for a loan (mortgage, car loan, etc.). The lender has an interest in the insurance check, because its collateral was lost or damaged. Accordingly, the check has been drawn payable to both your parents and the lender.
All three payees (your parents and the lender) must endorse the check before it can be deposited or otherwise negotiated. That protects the lender's interest in the insurance payment. Your parents need to discuss the matter with their lender, and do whatever the lender requires as a condition for their endorsement. That may take some negotiation, and it's possible the loan may have to be paid down or paid off before the lender will surrender its interest in the insurance proceeds.
If your parents attempt to deposit the insurance check without the lender's endorsement, the insurance company will either refuse payment of the check or will have a claim against your parents which will force them to pay the funds back. If your parents need guidance in negotiating with the lender, they should contact an attorney.
Published on BankingQuestions.com 4/17/08
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