I have accumulated large amounts of U.S. savings bonds (Series E and EE) during my lifetime and inherited even more bonds when my sister died.  With interest, these bonds are worth more than $300,000!  I don’t plan to cash the bonds, unless there is an emergency, and eventually plan to leave some of them to you through my will and the rest to my brother Charles.  But I’m concerned that Charles will owe income taxes when he cashes the bonds.  What can I do? 

You might consider establishing a charitable remainder trust in your will and bequeath the savings bonds to the trust.  Charles would receive a lifetime income from the trust, but there would be no income taxes due when the trustee redeems (cashes in) the bonds.  Your estate would also be entitled to an estate tax charitable deduction that might result in additional tax savings.  Charles would pay income tax only on his annual payments from the trust and we eventually would receive a significant benefit . . . but only after Charles dies.

We have dozens of creative ideas that can fit the financial and estate plans of our friends.  For help in your own planning, please write or call our office.

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