How to Cash Inherited Savings Bonds
Inheriting savings bonds can be a significant financial windfall, but it’s important to understand the process of cashing them out properly. Whether you’ve received bonds from a loved one or as part of an estate, here’s a step-by-step guide on how to cash inherited savings bonds.
1. Verify the Ownership
Before you can cash in the inherited savings bonds, you need to confirm that you are the rightful owner. This typically involves obtaining the bond certificate and any relevant documentation that proves the bonds were transferred to you. If the bonds were registered in the deceased’s name, you may need to provide a death certificate and other legal documents to the financial institution holding the bonds.
2. Contact the Issuing Financial Institution
Once you have verified ownership, the next step is to contact the financial institution that issued the bonds. This could be a bank, credit union, or the U.S. Treasury if the bonds are U.S. Savings Bonds. The institution will guide you through the process and provide you with the necessary forms to fill out.
3. Fill Out the Required Forms
You will need to complete specific forms to cash in the inherited savings bonds. These forms may vary depending on the type of bond and the financial institution. Be sure to provide accurate information and any additional documentation requested, such as identification and the death certificate.
4. Determine the Bond’s Value
Before you can cash in the bonds, you need to determine their current value. For U.S. Savings Bonds, you can use the TreasuryDirect website to calculate the value based on the bond’s serial number and issue date. For other types of bonds, the financial institution can provide you with the current value.
5. Choose How to Receive the Proceeds
Once you have determined the value of the bonds, you will need to decide how you want to receive the proceeds. You can choose to have the money deposited into your bank account, receive a check, or even have the bonds redeemed for cash.
6. Pay Any Taxes
When you cash in inherited savings bonds, you may be required to pay taxes on the interest earned. The tax rate depends on the type of bond and the length of time the bond was held. Be sure to consult with a tax professional to understand your tax obligations and ensure you are compliant with tax laws.
7. Keep Records
After you have successfully cashed in the inherited savings bonds, it’s important to keep detailed records of the transaction. This includes copies of the forms you submitted, the receipt for the proceeds, and any correspondence with the financial institution. These records will be valuable for tax purposes and for your personal financial records.
Inheriting savings bonds can be a rewarding experience, but it’s crucial to follow the proper steps to ensure a smooth and hassle-free process. By verifying ownership, contacting the issuing institution, filling out the required forms, determining the bond’s value, choosing how to receive the proceeds, paying any taxes, and keeping records, you can successfully cash in inherited savings bonds and manage your newfound financial resources wisely.
