How to Transfer Savings Bonds to a Living Trust

Transferring savings bonds to a living trust involves two important steps. First, you need to amend your trust documents to reflect the inclusion of the savings bonds as trust property. Additionally, because savings bonds are registered securities, you have to take some formal steps to legally convey a title to the savings bonds. This is accomplished by changing the name of the registered owner of the savings bonds.

Things You'll Need

• Trust schedule
• Public Debt Form 4000 (for paper bonds)
• Treasury Direct (for electronic bonds)

Instructions

1. Prepare an amended "trust schedule" that includes the savings bonds as one of the pieces of property held in the trust. You should specifically identify the savings bonds by registration number.

2. Prepare Public Debt Form 4000 and either name the living trust as the new registered owner, or add the living trust as a co-owner or beneficiary. Note that this step is required only if you own paper savings bonds.

3. Sign in to your Treasure Direct account. This step is for electronic savings bonds only, and if you don't already have an account, you can create one using the link in Resources.

4. Click on the "Update my Registration List" link in your account menu.

5. Add your living trust as either a co-owner or a beneficiary depending on what works best in your particular situation.

Tips & Warnings

• Unless you have a very good reason for doing transferring your savings bonds to your living trust, you should probably avoid the hassle by instead simply naming another person as the co-owner or beneficiary of your savings bonds. By using the savings bonds co-owner or beneficiary feature, you will avoid probate without using a living trust. However, you may have a peculiar circumstance where it might make sense to use your living trust. Just be sure you know why you are doing it because in the end, it creates more of a hassle.

• When you transfer a savings bond to a new owner, or add a co-owner, this can be considered a taxable event, which means you might owe income tax on the interest you have earned so far. Make sure you have the cash available to cover this tax before you make the switch.

References

• "Nolo's Make Your Own Living Trust"; Dennis Clifford; 2009

Resources

• Treasury Department: Public Debt Form 4000 (PDF)
• Treasury Department: TreasuryDirect