U.S. Savings Bonds and Louisiana Estate Planning

People often come into our estate planning law firm with stacks of United States Savings Bonds, and they don't know how to handle them for estate planning or estate administration purposes. U.S. Savings Bonds make their way into our office under two typical scenarios:

(1) An individual or couple is getting legal affairs in order and they don't know what to do with their stack of savings bonds; or

(2) A loved one has died and the loved one owned a stack of U.S. Savings Bonds, and the survivors don't know what to do with the bonds.

Estate planning in Louisiana can be more complicated that estate planning for residents of other states. We have community property, forced heirship, the Napoleonic Code, and we don't recognize certain forms of ownership (like Joint Tenants with Rights of Survivorship).

But as far as U.S. Savings Bonds go, Louisiana is similar to all of the other states. Here's a rundown of rules that apply to adult owners of United States Savings Bonds:

(1) One owner. When the one owner dies, the bond is part of the owner's estate. Probate (or "Succession") will be necessary to redeem the bond.

(2) Two people named on the bond and one has died. The surviving person is considered the owner.

(3) Two people are named on the bond and both have died. The bond is part of the estate of the person who died last.

Some people, for probate avoidance or asset protection purposes, wish to transfer their bonds to a trust during their lifetime. FS Form 1851 (revised in January 2018) permits individuals to have their bonds reissued in the name of a trust. When the government reissues a Series EE or Series I savings bond, it no longer provides a paper bond. The reissued bond is in electronic form in the governments online system called TreasuryDirect.

Talk to your estate planning attorney to determine the best way to handle U.S. Savings Bonds as they related to Louisiana Estate Planning and Succession law. For more information, you can look online at www.TreasuryDirect.gov

This post is for informational purposes only and does not provide legal advice. Please do not act or refrain from acting based on anything you read on this site. Using this site or communicating with Rabalais Estate Planning, LLC, through this site does not form an attorney/client relationship.

Paul Rabalais
Louisiana Estate Planning Attorney
Phone: (225) 329-2450