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.
However, if you convert a paper bond with a co-owner to an electronic bond, Treasury Direct marks it as a restricted security, which means that it has the same rules regarding registration changes as paper bonds, not electronic bonds, even though in all other respects the conversion makes it an electronic bond.