What is a Trustee Transfer?
A direct transfer of funds from your old HSA trustee/custodian to your new HSA trustee. There is no money or checks that you receive personally. This differs from a rollover as no money or check pass to you personally. The direct trustee-to-trustee transfer is the method that is recommended because you cannot trigger an unexpected tax or disqualify the transfer since you never touch the money. Trustee-to-trustee transfers are not subject to any tax withholding and are exempt from the one-per-year 60-day rollover rule. This rule states that if you rollover instead of using the direct trustee-to-trustee transfer, you must complete the rollover within 60 days by contributing the distribution from your plan to your IRA within that time frame. You are also limited to one 60-day rollover per year on that money.
