Cashing savings bonds after owner dies
My mother passed away. She had saving bonds that she kept
at home, and my sister took them. We don't know the value of the saving bonds,
but I have four other sisters and brothers and we don't know if my sister intends
to send everyone their share of the bonds upon redemption. Can she cash the bonds
and not share the proceeds?
-- William Whereabouts
There's a protocol established by the U.S. Treasury in redeeming
bonds owned by the decedent. Decedent is the legal term for the person who has
died. How they can be redeemed is determined by whether the decedent was the sole
owner on the bond.
Those rules, as described in the Treasury Direct publication,
of a Savings Bond Owner"
are summarized below.
|Rules for cashing savings bonds after owner dies:
||If only one person
is named on a savings bond, and that person is deceased,
the bond becomes the property of the person's estate.
both people named on a bond are deceased, the bond is the property of the estate
of the person who died last. |
one of two people named on a bond is deceased, the surviving person is automatically
the owner as if that survivor had been the sole owner from the time the bond was
This publication also describes what happens if a
surviving person is named on a bond, there's no survivor named on
a bond, the estate is being settled under special provisions of
state law relating to small estates and the potential taxes due
It's also possible for savings bonds to have been
registered with a sole owner, the decedent, but have a payable on
death election. If your mother had elected the bonds to be
payable on death, then the bonds with this election have a beneficiary. A
on the Treasury Direct Web site discusses registration possibilities
in greater depth.
You didn't mention if when your mother passed she
had a will, who was the executor of that will, if the estate was
in probate, etc., so I can't tell if your concern about whereabouts
of the savings bond proceeds is premature or precautionary. I recommend
that you talk to your sister. Ask her about how the bonds are
registered and what will happen with the proceeds. That lets her
know that you, and your siblings, didn't forget about this potential
To ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "financing
a home," "saving & investing" or "money."