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By Kimberly Lankford, Contributing Editor
May 9, 2018
From Kiplinger’s Personal Finance
What happens to my health savings account when I die? Do my heirs have to pay taxes on the money in it? –J.Y., Port Charlotte, Fla.
See Also: Best Health Savings Account
You should name a beneficiary for your HSA. You can name anyone you want, but selecting a spouse is preferable because a spouse can use the inherited HSA tax-free for eligible medical expenses. If you name someone other than a spouse, the HSA money is disbursed to the beneficiary and is taxable. If you don’t designate a beneficiary, the money will be included in your estate and will be taxed on your final income tax return.
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Article source: https://www.kiplinger.com/article/insurance/T021-C001-S002-how-to-bequeath-a-health-savings-account.html