What happens to my HSA when I die?

You will choose a beneficiary when you set up your HSA.

  • If your spouse is the designated beneficiary of your HSA, it will be treated as your spouse’s HSA after your death.
  • If your spouse is not the designated beneficiary of your HSA:
    • The account stops being an HSA, and
    • The fair market value of the HSA becomes taxable to the beneficiary in the year in which you die.
  • If your estate is the beneficiary, the value is included on your final income tax return.
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