When a person passes away, their estate must be settled. This includes any savings bonds they may have owned. An executor of an estate can collect savings bonds for the deceased person they represent. If the representative of a court-appointed estate requests the redemption of savings bonds that are part of the estate of the deceased bond owner, local financial institutions that are savings bond payment agents have the authority to collect the bonds.
If the court granted the representative limited powers to distribute or dispose of ownership of the estate, they should write to Treasury Retail Securities Services, providing a copy of the citation and a list or brief description of the limited powers of attorney. When collecting the bonds, proof of death and proof of appointment must be provided. If all landlords named on the bond have died, it is part of the estate of the last person who died. An estate planning lawyer can advise on how to hold savings bonds in coordination with an overall estate plan.
If the deceased parent was the sole owner or last surviving owner named in the bonds, they become part of their estate. To collect (redeem) paper EE or I bonds from an estate as a court-appointed representative, you must sign the payment request on the back of the bonds with an indication of your role. If heirs claim bonds with a small estate affidavit, include a copy; if you are using probate summary procedures, include a copy of the probate court order. When someone dies and leaves savings bonds behind, if no effort was made in estate planning, the transfer of ownership can be so simple that the beneficiary might not have to do anything at all.
However, if no arrangements were made before death, then it is necessary to complete the bond redemption process in the presence of a bank official. This leaves the executor with the task of calculating any interest accrued on the bonds and adding it to other income on the decedent's final tax return. Savings bonds are an important part of many people's estates and understanding how to handle them is essential for executors. By following these steps and consulting with an estate planning lawyer, executors can ensure that savings bonds are handled properly and that beneficiaries receive what is rightfully theirs.
