Changing a living co-owner (or owner)
Tuesday, March 21st, 2006
Categorized as: Savings Bond registration changes
I own Savings Bonds, both EE and I, that name co-owners who I no longer wish to have as co-owners. How do I remove their names and put someone else's name on them without cashing them in?
Unlike adding a co-owner to a Savings Bond registration that doesn't already have one or changing a co-owner who has died, changing a living owner or co-owner of a paper Savings Bond can have tax consequences and requires the permission of the co-owner.
If you want to do this, I recommend you read the chapter of my book, Savings Bond Advisor, on Savings Bond registration changes.
After that you'll understand whether the change would be taxable and what your other options are. If you decide to go ahead, you'll know what additional information to provide.
If you want to try it without that information, the form to use is Public Debt Form 4000.
For those who have electronic bonds in TreasuryDirect, on the other hand, the definition of co-ownership is different. The Treasury calls this a with registration rather than the or registration of paper Savings Bonds. You can change a living co-owner of a TreasuryDirect Savings Bond without creating a taxable event.
You can change a bond's co-owner without the co-owner's permission by converting your paper bond to an electronic bond, then changing the registration yourself in TreasuryDirect. My book has complete information on how to do this.
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I think it's also important to note that electronic savings bonds have different ownership form (primary ownership, connection word "WITH" as opposed to co-ownership in paper bonds, connection word "OR"). The registration for these can be changed in TreasuryDirect.
Tom, do you think there is a potential security concern when someone compromises your TreasuryDirect account, that they can change your registrations to make themselves the second-named registrant and then transfer the security into their own account? Granted, they would leave a trail, so would be very bold/stupid to do this.
Mario - Right you are! Paper and electronic Savings Bonds have an important difference when it comes to co-owner registrations. I've updated the post to incorporate your improvements.
As for the security concern you mention, I agree that someone who did this would certainly be caught, yet at the same time the account owner would be out the money. It's yet another reason to be very careful with your TreasuryDirect password.
I am the beneficiary and/or co-owner on E and EE bonds where my mother was primary owner. She passed away in 1991. They have not reached final maturity. I would like to change myself as primary owner and add a beneficiary and/or co-owner.
Carlene - the information you're looking for is here.
Tom Adams