Death; Designating Beneficiaries. The Account Owner may, on forms provided by the Custodian, designate one or more Beneficiaries to receive the balance in the Account upon the Account Owner’s death. Unless the Account Owner specifies otherwise, each Beneficiary designation filed with the Custodian by the Account Owner will cancel all previous Beneficiary designations. If you designate your spouse as Beneficiary or contingent Beneficiary of your HSA, then unless prohibited by law or otherwise provided in the applicable agreement or order, a divorce decree, annulment or other legal termination of your marriage or a fully executed agreement for legal separation will automatically revoke such designation of the spouse as a Beneficiary, without affecting any non-spousal Beneficiary designations. If such a revocation occurs and the spouse was the only designated Beneficiary, then until such time as a new Beneficiary designation is completed, the HSA will be treated as if there is no Beneficiary designated. Upon the death of an HSA Account Owner, any amounts remaining in the Account will transfer to the Beneficiary named in the Beneficiary designation form. If your named Beneficiary is your surviving spouse, then upon your death, your Account will be treated as your surviving spouse’s HSA and the transfer is not taxable. The surviving spouse would be subject to income tax only to the extent that any distributions from the HSA were not used for Qualifying Medical Expenses. If your named Beneficiary is someone other than your surviving spouse, then upon your death, your Account stops being treated as an HSA and the value of your Account must be included in the Beneficiary’s gross income. The includable amount is reduced by any payments from the HSA made for your Qualified Medical Expenses if those expenses are paid within one year after your death. If no Beneficiary is named, or if all the named Beneficiaries predecease you, then your estate will be deemed to be your Beneficiary. When the estate is your Beneficiary, the value of your Account must be included in income on your final federal income tax return. The taxable amount will be reduced by the amount of any estate tax paid due to inclusion of the HSA in your estate. Notwithstanding anything stated in this Agreement, upon learning of the Account Owner’s death, the Custodian may, in its discretion, make a final distribution to a Beneficiary of his or her interest in the Account. This distribution may be made without the Beneficiary’s consent an...
