10/01/2026
💡 HSAs offer incredible tax perks while you're living, but do you have a plan for what happens to yours down the road?
Health Savings Accounts are known for their "triple tax advantage," but the tax rules shift significantly when an account is passed along, especially if inherited by someone other than a spouse.
Morningstar highlights why thoughtful planning makes all the difference for your HSA's long-term value:
🔹 Spouses retain full benefits: When named as the primary beneficiary, a surviving spouse can take over the account and keep its tax-free status intact.
🔹 Non-spouse heirs face different rules: For non-spouse beneficiaries, the account loses its HSA status upon death, making the full balance taxable as ordinary income.
🔹 Charities are a smart alternative: Non-profits can receive remaining HSA funds completely tax-free, making them a great option for secondary beneficiary designations.
Taking a few minutes to review your beneficiary designations and organize receipts for past healthcare expenses can help ensure you and your loved ones get the absolute most out of your HSA.
📲 Read the full article for tips on building your HSA succession plan: https://www.morningstar.com/personal-finance/your-hsa-needs-succession-plan
Health savings accounts offer a trifecta of tax benefits, but they’re less valuable after an account owner dies.