Can a Co-Owner of a US Savings Bond Give the Bond to Another Co-Owner?

The U.S. Treasury can reissue savings bonds with ownership changes.

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A co-owner of a U.S. savings bond can transfer her co-ownership stake in the bond to a different co-owner under certain circumstances. Deciding factors include the two current owners' personal situation, type of savings bond and which current co-owner would be classified as the principal co-owner of the bond. The U.S. Treasury lays out the necessary steps to change the co-owner of a bond through the bond reissue process.

Ownership Status

Whether or not you can simply change out the co-owner on a savings bond depends on the type of bond. A change of ownership on a Series EE bond can be accomplished for any reason, including one co-owner who wants to transfer his interest in the bond to another co-owner. With Series I savings bonds, the replacement of a co-owner will be accepted only in the event of a death of a co-owner or a divorce between the existing co-owners. Series EE bonds pay a fixed rate of interest and Series I bonds pay interest which is adjusted twice a year to factor for the rate of inflation. A bond's type is clearly stated on the face of the bond.

Savings Bond Reissue Request

To substitute a new co-owner for an existing co-owner on a U.S. savings bond, submit the bond and a reissue request to the U.S. Treasury. Use a Treasury PDF Form 4000, Request to Reissue United States Savings Bond. The form can be downloaded or requested by mail through the website. On the form, list the reason for the reissue request -- in this case, a change of co-owner.

Signature Validation

Both current co-owners of the savings bond should sign the reissue request form. The signatures must be verified by a bank official, so don't sign the form before going to the bank for the signature certification. The bank officer will also need the Social Security number of the first named co-owner. Send the completed form and the savings bond to the Treasury using the address listed on the Form 4000.

Taxable Event

If the primary co-owner on the savings bond is the one transferring ownership, that owner must declare and pay taxes on the interest earned to date. The Treasury considers the primary owner to be the individual who initially paid for the bond or received it as a gift. In the absence of evidence indicating otherwise, the first listed co-owner is assumed to be the primary co-owner. If taxes are paid on the accrued interest, the new primary co-owner will be liable for the income tax on the interest earned after the reissue date.