Whose signature is needed to redeem co-owner savings bonds?
Wednesday, December 8th, 2004
Categorized as: Cashing in US Savings Bonds
Over the years we have purchased Series E/EE bonds. The bonds have been purchased on a co-owner basis with our grandchildren as co-owners. If we redeem them will our minor grandchildren need to sign them as well?
Tom's response
Either the owner or co-owner of a savings bond can cash it without the signature of the other. You should have no problem cashing them without the signatures of your grandchildren.
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If the bond has two names and there is the word "or" in front of the second name, does that mean we are coowners.
If we are coowners, according to the Federal Reserve 800 #, they told me I needed the second parties signature to reissue the bond and have my husband listed as POD/beneficiary. Is that correct?
Linda Skarupa
Linda - that is correct. OR between the names means you are co-owners.
A Savings Bond can only have a co-owner or a beneficiary, not both, so to make your husband the beneficiary you'd have to remove the co-owner.
With paper Savings Bonds, removing a co-owner requires the signature of the co-owner. If the co-owner being removed put up the money to buy the bond, removing that person from the registration will create a taxable event for that person - he or she will owe tax on the interest earned by the bond.
If you're going to create a taxable event anyhow, it can make sense to just cash the bonds and buy new ones, although it depends on how many dollars worth of bonds you have. My book goes into additional detail on this.
I have some bonds that has my dad's name first then it says or (my name). Can I cash these without his signature plus whose social security number does it go against. My bank has said if I sign them it will go against mine.
Hi Valene - Yes, you can cash the bonds without your dad's signature. The 1099-INT will be issued using the Social Security Number of the person who cashes the bonds.
However, the IRS says the taxes are actually owned by the Savings Bond's "principal owner," which the IRS defines as the person who put up the money for the bond or who inherited it. Moving the income from one tax payer to another is covered in my book.
Tom Adams