ABA Health Savings Account (HSA) Expert Certificate

What happens to HSA funds if the account holder dies?

The funds are forfeited. The HSA remains tax-free for any beneficiary. A spouse can inherit the HSA tax-free, but a non-spouse must pay taxes on it. The funds must be used immediately for medical expenses.

Correct Answer:

A spouse can inherit the HSA tax-free, but a non-spouse must pay taxes on it.

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