Transferring ownership of I-Bonds at Treasury Direct to a living trust

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Fremdon Ferndock
Posts: 334
Joined: Fri Dec 24, 2021 12:26 pm

Transferring ownership of I-Bonds at Treasury Direct to a living trust

Post by Fremdon Ferndock »

I'm considering whether to transfer the ownership of my I-Bonds held at Treasury Direct to a living trust created for that purpose. My principal reason for this would be (1) to get around the single beneficiary (POD) designation at TD, since the trust could specify successor trustees and multiple beneficiaries; and (2) It might make things easier for my I-bonds to be liquidated for my benefit if I become disabled and unable to manage my finances competently.

My understanding is that the I-bonds can be reissued to my revocable trust. I'm wondering if this would be a good idea. In particular, would re-issuing the bonds to my revocable trust be a taxable event? Can a simple trust for this purpose be prepared DIY with trust software, or should I have it prepared by an attorney?
Risk cannot be reduced -- it can only be changed from one form to another
evelynmanley
Posts: 410
Joined: Tue Sep 21, 2010 9:13 am

Re: Transferring ownership of I-Bonds at Treasury Direct to a living trust

Post by evelynmanley »

If I were in your position, I would call TD to get a definitive answer about whether that kind of transfer is allowed.

Make sure you let them know that you're talking about electronic, not paper I-bonds, if that's the case. To do so with paper bonds, you have to fill out a form and get it certified. (https://www.treasurydirect.gov/indiv/pl ... eissue.htm)

This link addresses your question (the "Keep Them Separate" section) but I don't think the explanation here is very clear. That's why I would call TD to be sure.

https://thefinancebuff.com/buy-i-bonds- ... r-llc.html


Re: DIY trust software:

https://thefinancebuff.com/simple-livin ... bonds.html

https://thefinancebuff.com/buy-more-i-b ... trust.html
donall
Posts: 1014
Joined: Tue Mar 13, 2012 6:45 am

Re: Transferring ownership of I-Bonds at Treasury Direct to a living trust

Post by donall »

I did this a while ago for all the reasons you list. It was not a taxable event as both the living trust and individual accounts share the same social security numbers. Think of it as changing the titling of an account.

The Finance Buff has some excellent instructions on how to do this https://thefinancebuff.com/buy-more-i-b ... trust.html. Check out transferring instructions near the end of the posting. It was not difficult, but I think a medallion stamp was needed and since I was transferring from a personal account I got the sternly worded email from Treasury Direct.
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