If my mother has passed away and I have inherited her savings bonds which are in her trust, do the bonds have to be cashed right away?

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If my mother has passed away and I have inherited her savings bonds which are in her trust, do the bonds have to be cashed right away?

My mother left approximately $80,000 in bonds in her trust to me and my 3 siblings. Some do not mature until next year. Do we have to cash them in any specific timeframe and will we have to do an income tax return for my mother when we do?

Asked on March 17, 2012 under Estate Planning, Michigan

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If you have inherited your mother's savings bonds, you do not need to cash them in right away. You can wait until they mature. You will need an affidavit of the successor trustee of your mother's trust stating that you have received under the trust the specific bonds and their numbers.

You will have to do tax returns for the trust but until the bonds are cashed in, there is no taxable event. However, for tax purposes, you will need to know how much interest accrued on these bonds at the time of your mother's passing in that the accrued interest up to her passing would be included in her trust's estate tax return.


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