Hi Chas,
Your wife will not owe tax when she inherits the stock however, she might or might not owe tax (capital gains tax) when she sells the stock. Your wife will be responsible for taxes on dividends from the inherited stock as soon as the shares have been transferred into her name and yes, she will have to include the dividends received as income on your tax return.
Regarding the interest on the savings bonds, the principal is tax-free but your wife will owe income tax on some or all of the accrued interest and it must also be reported as income on your tax return.
https://turbotax.intuit.com/tax-tips/estates/estates-and-trusts/L9f1Fywy8
Regarding opening a new trust, I would suggest that you consult with a trust attorney to help you in that regard. The tax rules vary with the type of trust (grantor or non-grantor) you elect to open for your grandchildren. If you select a Grantor's trust then the grantors report all income from the trust on their own individual tax returns. With Non-grantor trusts, the trust itself or its beneficiaries pay tax on taxable income.
https://turbotax.intuit.com/tax-tips/family/navigating-family-trusts-and-taxes/L27DrzOCJ
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