What Happens to My HSA When I Die?

One common question that people with a health savings account have is, what happens to my HSA when I die?

It Depends on Your Beneficiary

Well, the answer depends on who your beneficiary is.

• If your spouse is the beneficiary, then he or she would inherit the HSA as a health savings account and would be able to continue to use the funds for qualified medical expenses.

• If anyone else is designated as the beneficiary, then:

  • The HSA will be cashed out

  • The government will keep its share since the funds were never taxed in the first place

  • The beneficiary will receive the remaining amount as cash, not as an HSA