Don’t forget about your savings bonds when you’re working on your estate plan

On Behalf of | Apr 7, 2021 | Estate Planning |

Savings bonds may seem like a quaint relic of another time. Indeed, they aren’t as popular as they were many decades ago. However, if you had relatives who regularly purchased them, perhaps through their employer, and they were passed down over the years in your family, you could be sitting on a substantial amount of money.

So as you develop your estate plan, what do you do with the bonds that are now in your name? First, if you have any bonds that have matured, it’s wise to cash them in and reinvest the money somewhere, as they’re no longer earning interest.

How to title your bonds

As for the bonds that haven’t matured or any that you’re keeping, there are several ways you can handle them to make things simpler for your heirs and beneficiaries. If your name is the only one on the bond, or if you’re the last living person named on the bond, it will automatically become part of your estate after you die.

The easiest way to do that, if you have a revocable living trust, is to reissue the bonds in the name of your trust. Then, like all of the other assets in your trust, they’ll likely avoid probate (unless their total redemption value is over $100,000).

If you want the bonds to go to one or more specific people after you die, you can have them reissued with joint owners or beneficiaries. This will allow any easy transition to the other person. If you name a joint owner as opposed to a beneficiary who only gets the bonds when you die, you can gift them the bonds at any time.

Make sure that your bonds can be found

If your savings bonds have been collecting dust in your safe deposit box for years, you may be surprised to learn that they’ve gone digital. Savings bonds are now managed, issued and cashed in through the website TreasuryDirect.gov.

The most important things are not to forget about your savings bonds and to make sure that they are included in your estate plan. If you’re hanging on to your paper bonds, make sure that your executor knows where they are. If you’ve moved everything online, be sure they know how to access your TreasuryDirect.gov account. Your estate planning attorney can provide additional guidance.