What tax rules apply when the HSA account owner dies?
If a surviving spouse is the beneficiary of the deceased account owner’s HSA, then that HSA is to be treated as the surviving spouse’s HSA. If a surviving spouse is not the beneficiary of the HSA, then the deceased account owner’s HSA ceases to be an HSA as of the date of death. The fair market value of HSA assets shall be included in the income of the beneficiary(ies).
