Inherited savings bonds can often create complications for the beneficiaries who receive such instruments. There are a wide range of choices that a person has to make with the savings bonds they inherit. The inheritor should first use the ‘savings bond calculator’ to determine the instrument’s worth. The individual then needs to decide whether to redeem or reissue the savings bonds. The decisions that a person makes about savings bonds will have a major impact on what sort of taxes they would have to pay. The savings bond beneficiary would have to choose whether to report the income to the decedent or the estate. A prudent person who inherits savings bonds should be careful and well informed about the choices that they make.
See Deborah L. Jacobs, Inherited Savings Bonds: What You Need To Know, Morningstar, June 2, 2015.
Special thanks to Jim Hillhouse for bringing this article to my attention.
