13 Mar My parents died. What do we do with their EE bonds?

Q. My parents died and had a bunch of EE bonds in their names, and some won’t mature until next decade. Do we deposit those and cash them out into the estate account, or hold on to them? Is there a loss to cash them out 5+ years early, or is that one of these inheritance loopholes?
— Beneficiary

A. We’re sorry for your loss.

There are several options for the Series EE bonds, which mature 30 years from their issue date.

If the EE bonds owned by your parents have not yet matured, the executor/administrator of the estate can either redeem (or cash in) the bonds and deposit the proceeds in the estate account, or distribute the bonds in kind to one or more of the estate beneficiaries, said Marley A. Guerrera, attorney with Wells, Jaworski & Liebman, LLP, in Paramus.

If your parents owned the bonds jointly, then the executor/administrator of the estate of the second-to-die parent has the authority to redeem or distribute the bonds, she said.

An individual EE bond cannot be split between multiple beneficiaries, Guerrera said.

“Therefore, if the executor/administrator of the estate decides to distribute the bond in kind rather than redeem it, each EE bond can only be distributed to one beneficiary,” she said. “The bond can be reissued to the beneficiary, and he or she will begin to earn the interest from the bond and will be liable for the income taxes on that interest.”

She noted an EE bond can be redeemed beginning 12 months from the issue date. There is a penalty if the bond is redeemed during the first 5 years from the issue date, such that the last 3 months of interest will be lost, she said.

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This story was originally published in March 2026. 

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