Health Savings Accounts (HSAs) and Trusts

I’ve had several people ask me recently, “can I put my health savings account into my living trust, and if so, how?”  That’s a great question!

The answer is yes, but you are not actually putting it “in” the trust . . . you are naming the trust as a beneficiary.  Health Savings Accounts (commonly referred to as HSAs) are interesting “animals.”  We typically think of them like an ordinary bank account with a restriction that they can be used for only qualified medical expenses.  However, for trust “funding” purposes, they behave more like retirement accounts (e.g. IRAs).

This means that you designate the trust as the beneficiary of the account rather than changing ownership of the account to the trust (warning: changing ownership could have negative tax consequences).  If you are married, I generally suggest naming your spouse as the primary beneficiary of the account.  This is because it can then be treated as the spouse’s HSA if something happens to you.

You would then name your trust as the contingent beneficiary.  Naming the trust (or individuals other than a spouse) as the primary beneficiary will make the account taxable to those beneficiaries in the year of your death.  A spouse is the only one who gets the special HSA treatment stated above.  Single individuals should typically name the trust as the primary beneficiary.

Do you or someone you know have a question about estate planning or business planning?  If so, let me know and I try to answer it in a future blog post.  I’m sure you’re not the only one with the question, so you will be helping other readers by asking.

Michael Lichterman is an estate planning and business planning attorney who helps families and business owners create a lasting legacy by planning for their Whole Family Wealth™.  This goes beyond merely planning for finances – it’s about who your are and what’s important to you.  He focuses on estate and asset protection planning for  the “experienced” generation, the “sandwich generation” (caring for parents and children), doctors/physicians, nurses, lawyers, dentists, professionals with minor children, family owned businesses and pet planning.  He takes the “counselor” part of attorney and counselor at law very seriously, and enjoys creating life long relationships with his clients – many of which have become great friends.


  1. Great post! My clients also often ask we this question and I respond similarly. Thanks for helping get the word out.

  2. Bank of America apparently does not understand or comprehend living trusts. I’ve tried to name the revocable living trust (set up by my wife and me) as the contingent beneficiary, but they are insisting on a birth date and an address for the trust.

  3. Neil, that is not entirely uncommon. I provide all my clients with something called a “Certificate of Trust” that has that information on it so they have it handy when a bank asks. I suggest checking with your attorney for answers to those questions.

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