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Say I had $10,000 USD in a Health Savings Account. What would happen to that money when I died? Would my heirs get it? Would it go into an HSA account for them, or could they just get the raw cash value?

4

You can designate one or more beneficiaries for your HSA account who will get the money when you die. Some states require consent from your spouse (if you're married) if they are not the beneficiary. The funds maybe taxable to the beneficiary.

If you don't designate any beneficiaries, by default the money will go into your estate and be handled the same as other assets. The funds may be taxable by the estate.

If you had any medical expenses before you died, it might be possible to pay them from the HSA.

When looking around for information about this I would start with the IRS publications which are the authoritative source of this information. Other articles you read are usually just summarizations of this information and can sometimes be incomplete or incorrect.

http://www.irs.gov/publications/p969/ar02.html#en_US_2014_publink1000204096

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