Hubby has given his grown daughters some money. It is below the $12,000
> mark. One is being given this via daughter's MIL (daughter doesn't speak > to hubby).
Why he wants to give nonspeaking daughter anything other than contempt is beyond me, but it's his money. I assume that nonspeaking daughter will speak to his money, so regardless of who delivers the check, it should be made out to the daughter.
Both MIL and speaking daughter have asked for a signed note
> stating it is a gift and not payment for property or labour, so they can
> prove it isn't taxable income.
Write "gift" on the memo line. If they don't like it they don't have to cash it.