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inhereted I-Bonds

Posted on: 22nd Apr, 2010 06:59 am
we inhereted 5, I bonds, I would like to know if we can;
1) leave them in the trust without changing ownership, they are in the trust name now.
2) change ownership to each of us and keep them for as long as we want.
3) use one of them to pay down my sallie mae school loan without changing ownership
4) they will be 5 years old in november of this year and april of next year
5) how long do we have before we need to cash them and distribute them, the trust has no timelines.
Hi joe,

You can keep the bonds in the trust without changing the ownership till the time you wish to cash them. Changing the ownership at this point in time might be subject to taxes. If you want to pay off your Sallie Mae School loan by cashing the bonds, you can do that. But before you use the bonds to pay off your loan, you may have to change the ownership in your name.

You should not cash the bonds prior to 5 years, else you would have to pay a 3-months earnings penalty. I believe you can keep the bonds without cashing them till the time they stop earning interest at the end of 30 years.
Posted on: 23rd Apr, 2010 01:01 am
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