Co-Ownership Vs. Beneficiaries With Savings Bonds

Savings bond rules allow a maximum of two names to be listed on any bond. The two names can be a pair of co-owners or a bond can have a single owner and a beneficiary. You cannot put co-owners plus a beneficiary on a bond. Although it is possible to change the ownership listing of a bond, getting it right the first time can save work later.

If a savings bond is titled with co-owners, each owner has equal rights concerning the bond. One owner can redeem the bond on her own, without the signature or consent of the other owner. For a couple, co-ownership on your savings bond provides equal rights to both of you. The one difference between co-owners is that -- on paper savings bonds -- only the Social Security number of the first listed owner is used. For the electronic versions of savings bonds, both Social Security numbers will be collected by the Treasury.

A savings bond beneficiary has no rights concerning the bond while the owner is alive. The owner can do what he wants, such as cashing the bond or changing the beneficiary. The beneficiary becomes the owner when the listed owner dies. With a listed beneficiary, a savings bond does not go into the owner's estate. It passes directly to the beneficiary. The beneficiary listing can be used to leave bonds to your children.

If a spouse brought single-owner bonds into a new household and wants to add the other as co-owner or beneficiary, the Treasury Department can handle the task and reissue the bonds the way you want them titled. Mail your bonds and a Public Debt Form 4000 -- which you can download from TreasuryDirect.com -- to the Treasury to request a reissue. You must first go to a bank to have your signatures on the form verified by a bank officer.