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How to cash late relative’s savings bond?

Series EE bond © K. Geijer -
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Dear Dr. Don,
I have a Series E savings bond from 1943, which lists my late aunt and her late husband as the owners. I have no death certificate for either of them. Can this bond be cashed? If so, where do I go and what do I do to cash it in?

Thank you,
— Karen Cashin’

Dear Karen,
First, we need to know whether it is worth the effort. Check out the savings bond calculator on the TreasuryDirect website to figure out what the bond is worth. A Series E savings bond issued in 1943 stopped earning interest in 1983. A $100 face-value Series E savings bond purchased in January 1943 cost $75, and earned nearly $325 in interest by the time it matured in January 1983. It would be worth that same approximately $400 today.

The Treasury provides more information about what to do after a savings bond owner has died.

I have some questions for you. How did the savings bond come into your possession? Did you inherit it from the last owner’s estate, or did you find it in their effects? In your case, how the last surviving owner’s estate was administered influences documentation required to cash the bond. If the estate was settled without administration, the form is titled “Disposition of Treasury Securities Belonging to a Decedent’s Estate Being Settled Without Administration.”

You’ll need to provide death certificates for all deceased registrants, or owners, of the bonds. You also need to establish your eligibility to act as the so-called voluntary representative of the last owner of the bond to die. If your aunt or uncle have children or grandchildren still living, then your position as voluntary representative is questionable.

Along with the cost of obtaining death certificates, you’re likely to face a tax bill on the interest earnings. Most savings bonds owners defer paying federal income tax on the interest earnings until the bond matures rather than declare the income each year. If the decedent’s estate didn’t pay the taxes due, there’s also a late payment of taxes issue on the interest earnings. You’ll want to work with your tax professional on this aspect of redeeming the bond.

As we said at the outset, you now must decide if it’s worth the bother to chase all this down to cash in the savings bond. And that’s if, in fact, it is actually yours to cash in at all.

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