Guidelines for Check to John Doe for Jane Doe

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Question:

We have customers who have social security checks for dependents made in the following manner: "John Doe For Jane Doe" wherein in some cases the dependent is either a child or disabled person. I argue that these checks are payable to "John" as he is the first payee, and "Jane" is not actually a payee. Therefore, the check should be negotiable by John, or depositable into an account held solely by John. My FI has recently instituted a rule requiring these types of checks to be deposited into a) a UTMA account for "Jane" b) a Rep-Payee account for Jane or c) an account held solely by Jane. As in many cases Jane is either a minor or disabled, I believe forcing an account to be opened under her name to be irresponsible banking. I would like to know the guidelines for negotiating a check made either to "John Doe For Jane Doe" or "John Doe For the Benefit of Jane Doe"

Answer:

It would inappropriate to require that such payments be placed in an UTMA account. As parent, the payee (John, in your example) can hold the funds for Jane and other SSA recipients in the family in a single account (although savings funds should be separately held for the individual beneficiaries). Review the information for representative payees on the SSA website at http://www.ssa.gov/pubs/10076.html.

First published on BankersOnline.com 8/6/12