Cashing in EE bonds
I own approx. 20K in EE US bonds which will have staggered maturity in a few years. My recently deceased mom is the beneficiary. I was going to make my sister the new beneficiary but realized that this would have to be done online. We are seniors and if something happens to me, I don’t want her to have to jump through those hoops. Should I just cash them in over a two year period to soften the tax hit, and put the money into a high yield CD at an easily accessible bank making her beneficiary?
Terry Says
NO! Don’t cash them in before they mature. If they are that old,then they carry a high “floor” rate — much higher than you could get in a CD today. And if you hold them at death and they are part of your estate (instead of being named as a beneficiary) it’s possible that there would be no tax due on the gains — and none on the estate either, unless your estate is over $11.2 million.
You must cash them in when they mature, and pay applicable taxes if you are alive. But don’t do it until absolutely necessary.
