Savings bond becomes headache for spouse
Dear Dr. Don,
I have a $100 Series EE savings bond purchased in November 1981. The bond is in my husband’s name and he has passed away.
I have a certified death certificate and have been trying unsuccessfully to cash this savings bond. The bank I deal with says it can’t cash it and that I have to go through the U.S. Treasury. This is ridiculous. Luckily, it is not a whole lot of money.
According to your website, I should be able to cash this at most any financial institution. After this experience, I will never purchase bonds as a savings. Can you help me? What am I doing wrong? My bank is not a local bank; it is a very large financial institution. Talk about a runaround.
— Barbara Bonds
I entered the savings bond’s purchase date into the Savings Bond Wizard, and I found: The bond is currently worth $276.84, next pays interest in November 2010, currently earns 4 percent interest and has earned an average yield of 6.1 percent since purchase. Its final maturity date is November 2011, after which it stops earning interest.
The TreasuryDirect Web page “Death of a Savings Bond Owner” lays out all the different possible ownership issues. From your message, it appears ownership of the bond falls into the category “If There’s No Survivor Named on a Bond,” reprised below:
If There’s No Survivor Named on a Bond
When there is a Court-Appointed Representative or When a Court-Appointed Representative Has Been Discharged
When there is no court involvement, if a decedent’s estate:
- Has not been and will not be formally administered through a court.
- Has not been and will not be settled under special provisions of state law relating to small estates.
- Contains bonds totaling $100,000 or less (value as of the date of death).
The persons entitled to request disposition of the bonds should fill out a PD F 5336. If the estate contains bonds totaling $100,000 or more (current redemption value), the estate must be administered.
The bonds, a completed PD F 5336, and proof of death of all deceased registrants should be sent to:
Bureau of the Public DebtP.O. Box 7012Parkersburg, WV 26106-7012
The other possibility is that ownership of the bond falls under the heading “Estate Is Being Settled under Special Provisions of State Law Relating to Small Estates.” The same TreasuryDirect Web page presents the requirements for redeeming the bond in this situation.
Don’t blame your bank for following the rules. There are a few hoops to jump through, and some income taxes to pay on the deferred interest, but you will be able to cash in the bond from The Bureau of Public Debt.
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