Changing a Savings Bond’s owner
Friday, February 10th, 2006
Categorized as: Savings Bond registration changes
I have given my granddaughter a bond a month since 1988. I am the owner and she is the beneficiary. Now I want to drop my name from those bonds so she may be the sole owner. How is that done?
Because of the way the bonds are registered, there’s no legal way for you to get out of paying the income tax on the interest these bonds have earned.
My recommendation would be for you to cash the bonds, hold back enough money to pay the income tax, and then either give your granddaughter the money or buy her new Savings Bonds that are in her name alone.
My book has a lot more details on this kind of transaction, including how to have the ownership changed on the existing bonds and why that causes problems for people.