I Bond beneficiary

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Topic Author
nickfrank
Posts: 26
Joined: Tue Feb 23, 2010 1:39 pm

I Bond beneficiary

Post by nickfrank » Tue Oct 16, 2012 12:45 pm

My wife and I recently updated our wills and were advised by our attorney to change beneficiary designations for our IRA's, 401K's and IBond's to our trust in order to avoid probate costs. We currently hold the bonds jointly with a primary and secondary
owner so that the secondary owner receives the bond in the event of the death of the primary owner. If the secondary owner dies or if both die at the same time there is no other beneficiary designation so the bond would go to probate for distribution. It appears to me that one is not allowed to name a second beneficiary on the bond. The choice is either jointly held OR beneficiary not both.
Can anyone speak to this issue or am I interpreting the I Bond beneficiary designation incorrectly?

Nick

Topic Author
nickfrank
Posts: 26
Joined: Tue Feb 23, 2010 1:39 pm

Re: I Bond beneficiary

Post by nickfrank » Tue Oct 16, 2012 1:46 pm

Please help me with this question!

Thanks,

Nick

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Phineas J. Whoopee
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Re: I Bond beneficiary

Post by Phineas J. Whoopee » Tue Oct 16, 2012 1:54 pm

NICKFRANK wrote:My wife and I recently updated our wills and were advised by our attorney to change beneficiary designations for our IRA's, 401K's and IBond's to our trust in order to avoid probate costs. We currently hold the bonds jointly with a primary and secondary
owner so that the secondary owner receives the bond in the event of the death of the primary owner. If the secondary owner dies or if both die at the same time there is no other beneficiary designation so the bond would go to probate for distribution. It appears to me that one is not allowed to name a second beneficiary on the bond. The choice is either jointly held OR beneficiary not both.
Can anyone speak to this issue or am I interpreting the I Bond beneficiary designation incorrectly?

Nick
Hi Nick,

Yes, I believe you are correct. See:
http://treasurydirect.gov/indiv/researc ... gister.htm

The most specific of details depend on whether the bonds are paper or electronic (as shown in the link), but there are three basic options:

1 - One person owns the bond.
2 - Two people own the bond and the survivor (if any) owns it after the death of the other. For paper bonds only, either can transact.
3 - One person owns the bond and there is a beneficiary who, if still alive, becomes the owner after the first owner dies.

PJW

sscritic
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Re: I Bond beneficiary

Post by sscritic » Tue Oct 16, 2012 1:55 pm

If you want them in your trust, title them in your trust now. Why wait until you are dead? How to do it depends on that age old question, paper or plastic?

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HueyLD
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Re: I Bond beneficiary

Post by HueyLD » Tue Oct 16, 2012 2:05 pm

Nick,

Here is the TD form you need to reissue your savings bonds to a personal trust.
http://www.treasurydirect.gov/forms/sav1851.pdf

Follow the instructions very carefully to avoid tax hit.

sscritic
Posts: 21858
Joined: Thu Sep 06, 2007 8:36 am

Re: I Bond beneficiary

Post by sscritic » Tue Oct 16, 2012 2:11 pm

Another plan: title them in your name with your trust as beneficiary. You die, they go to the trust. Your spouse dies, you have them just the way you want them. If you both die, they still go to the trust.

Topic Author
nickfrank
Posts: 26
Joined: Tue Feb 23, 2010 1:39 pm

Re: I Bond beneficiary

Post by nickfrank » Tue Oct 16, 2012 3:35 pm

Thank you for your help.

Nick

WolfgangPauli
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Re: I Bond beneficiary

Post by WolfgangPauli » Wed Mar 13, 2019 10:10 pm

HueyLD wrote:
Tue Oct 16, 2012 2:05 pm
Nick,

Here is the TD form you need to reissue your savings bonds to a personal trust.
http://www.treasurydirect.gov/forms/sav1851.pdf

Follow the instructions very carefully to avoid tax hit.
Do I need to do this for electronic bonds as well? Is there a way to do this on line?
Twitter: @JAXbogleheads | EM: JAXbogleheads@gmail.com

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HueyLD
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Re: I Bond beneficiary

Post by HueyLD » Thu Mar 14, 2019 6:23 am

First, you need to open an "entity" account in your trust name.

Second, you need to fill out form 5511 in order to transfer bonds from your personal account to your trust account. This cannot be done online and the form must be signature guaranteed.

If you run into questions, you can call their very helpful staff at 1-844-284-2676. They answer the phone between 7 a.m. And 6 p.m. eastern time.

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Steelersfan
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Re: I Bond beneficiary

Post by Steelersfan » Thu Mar 14, 2019 7:03 am

HueyLD wrote:
Thu Mar 14, 2019 6:23 am
First, you need to open an "entity" account in your trust name.

Second, you need to fill out form 5511 in order to transfer bonds from your personal account to your trust account. This cannot be done online and the form must be signature guaranteed.

If you run into questions, you can call their very helpful staff at 1-844-284-2676. They answer the phone between 7 a.m. And 6 p.m. eastern time.
+1 to all of that, especially the helpful people on the support line.

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