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Savings Bond

You may have some long-forgotten U.S. Savings Bonds tucked away in a drawer or safe deposit box. Here are some ways that you can use these bonds to achieve your charitable goals:

1. During life, savings bonds cannot be donated directly to a charity. The bonds must be redeemed and the proceeds contributed. The charitable deduction you would receive would help to offset the taxes owed on the redemption.

2. You can designate that Sacred Heart Southern Missions receives the bonds through your estate plan; at present, that is the only way to avoid paying taxes (ordinary income) upon the redemption. You cannot leave it up to your executor or trustee to make that decision - it must be specifically stated in your plan. If you want Sacred Heart Southern Missions to receive a portion of your bonds, you should further include the serial numbers in the bequest stipulation. This technique is attractive because a charity is the only entity that can avoid paying taxes related to the bonds, and frees up other assets (perhaps more tax-advantaged ones) to give to heirs.

3. A great technique for those who own savings bonds that have stopped paying interest is to redeem the bonds and use the proceeds to fund a charitable gift annuity. The gift annuity would pay you and/or another person income for life. This technique takes bonds that are essentially "dead" (no longer paying interest) and using the proceeds from the redemption to create an income stream that you could not outlive. Further, your income payments would be partially tax-free! Please contact us for further details.

Please contact Steve Koepke at 888.217.4829 or via email at skoepke@shsm.org