If you are enrolled in a high-deductible insurance plan, you might have a Health Savings Account (HSA) or a Medical Savings Account (MSA). These accounts permit the owner to make tax-deductible contributions to pay for qualifying medical expenses. Any unused funds and interest are carried over year to year, so your HSA or MSA has the potential to be a sizeable account!

Who should be the beneficiary of your HSA?

If you are married and your estate won’t be taxable, then it is a good idea to name your spouse as the designated beneficiary of your HSA. This is because your HSA is treated as your spouse’s HSA after your death and he or she can continue to use it for qualifying medical expenses.

For any beneficiary that is not your spouse, the HSA will terminate and any funds will be dispersed to the beneficiary. Depending on your situation, you might want to name your trust or, alternatively, your children as your beneficiary. Talk to your estate planning attorneys at Rochford & Langins to determine what the best scenario is for you!

One additional “fun” fact: your HSA can be used to pay any qualifying medical expenses incurred during your life for up to one year after your date of death.