Complicated 1099 Situation

[MJSMan]

I am in Oregon.

So, I have got a rather complicated situation on my hands. I am a web designer, and I work with many graphic designers. I was working with one a few months back, we'll call him John. He started a substantial chunk of work for me, that would have ended up amounting in about $5,000.

Unfortunately, he had a bi-polar relapse and ended up in the hospital. After I had assessed the work he actually did, I determined a fair price to pay him would be $1,950. The money isn't even the issue, actually. My legal issue is this. He is in an adult psych ward, and John's grandmother, let's say her name is Shelly; she wants me to just make a check out to John for her to deposit in his account, and they'll just hold on to it until he is out of the hospital.

Now, I would assume that I would have to get expressed written consent from John to do this, legally speaking. Would that be correct, or is it okay to just write the check to him and hand it over to Shelly?

 

[justalayman]

I don;t believe there is anything preventing you from giving the check to his G-mom but should something happen (not saying G-mom is a scammer but you never know) are you prepared to deal with it?

If John claims later on that he never recieved the money and g-mom had no authority to recieve the check, you could be on the hook for another $2k and have to deal with the legal system to collect from g-mom

I have worked places that were very casual and had no problem doing this but I have also worked places where they mandated a signed letter requesting the check.

Unless G-mom has a POA, I would hang on to the check until John can claim it himself. G-mom does not have the authority without a POA to even deposit the check without Johns signature so it would be worthless to bother.

 

[MJSMan]

Yeah, personally, I have no problem giving it to his grandmother. But, from a business and legal standpoint, I simply can't afford for him to "get better", find out that has g-ma spent the money on his bills, and then relapse again and try to sue me. I think I'll give her a call and let her know that without his written consent, it's too much of a liability.

 

[pattytx]

I agree with the advice justalayman gave you. I wouldn't want to take the chance.

Tough break for all concerned; hope he gets better.