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Withdrawals are tax-free when the money is used for qualified education expenses. But you have to withdraw all the funds by age 30 to avoid a tax penalty.

TO PAY BONDS TO A VOLUNTARY REPRESENTATIVE OF A NONADMINISTERED ESTATE: The person applying as voluntary representative must complete a Disposition of Treasury Securities Belonging to a Decedent's Estate Being Settled Without Administration (FS Form 5336).

The Education Tax Exclusion The IRS lets you avoid paying taxes on interest earned by Series EE and Series I savings bonds when you redeem them if you use the money toward qualified higher education costs for yourself, your spouse, or any of your dependents.

There is no penalty if you simply hold onto the bond after five years. There is value in holding onto most bonds. The longer they mature, the more interest bonds earn.

The short answer is yes, you generally will be responsible for taxes owed on savings bonds you inherit from someone else. The good news is that you may be able to defer taxes on inherited savings bonds or avoid it altogether in certain situations.

Account Authorization (FS Form 5444)