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Redeeming savings bonds if owners have died

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Dear Dr. Don,
I inherited two $100 Series E savings bonds and 14 $500 Series E savings bonds from my mother. They were given to her by my grandparents, who had been given the bonds by a family friend. My question is: Are these bonds redeemable?

They don’t have a Social Security number on them, and they’re not signed. They were issued from 1941 through 1948. Also, all involved parties are deceased. How would you go about finding any information about these bonds other than what they could be worth?

— Gregory Grandchild

Dear Gregory,
Since the $100 bonds are worth between $362 and $547, and the $500 bonds are worth between $1,811 and $2,733 each, it’s worth jumping through some hoops to try to cash these in. The Treasury’s Savings Bond Wizard at will let you calculate the exact value of these bonds.

These savings bonds earned interest for 40 years but stopped paying interest in the 1980s, so the bonds have gone more than two decades without earning a penny in interest. You’d want the Internal Revenue Service to consider that when determining the past-due income taxes on the interest — but the agency won’t.

The TreasuryDirect website presents the steps you need to take to redeem matured savings bonds when there is no surviving owner or beneficiary named on them.

You will need to establish both your mother’s claim to the bonds upon your grandparents’ deaths and your claim to the bonds after your mother’s death, and that will make it an interesting exercise.

In your shoes, I’d try starting the process on my own. But you should consider hiring an attorney if legal issues crop up and you need assistance. Taxes, legal fees and the costs involved in establishing your ownership of these bonds will all eat away at your bottom line.

A note to seniors who are reading this column and are sitting on a stash of matured bonds: Deal with them now, and don’t leave them as problems for your children. Work with a tax professional to manage the taxes and penalties associated with redeeming the bonds, and don’t stick your head in the sand and leave a mess for your estate.

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