![]() (3) If the estate is solvent and the will expressly empowers the personal representative to pay the expenses without an order of court, an allowance by the court is not required. (2) In no event may the allowance exceed $10,000 unless the estate of the decedent is solvent and a special order of court has been obtained. (c) (1) Funeral expenses shall be allowed in the discretion of the court according to the condition and circumstances of the decedent. ![]() (b) Subject to the priorities contained in § 8-105 of this subtitle, the personal representative shall pay the funeral expenses of the decedent within six months of the first appointment of a personal representative. (a) In this section, “funeral expenses” includes the costs of a funeral, a burial, a cremation, a disposition of the decedent’s remains, a memorial, a memorial service, food and beverages related to bringing together the decedent’s family and friends for a wake or prefuneral or postfuneral gathering or meal, and any other reasonable expenses authorized by the decedent’s will. * For estate or tax planning advice, contact a professional tax consultant.MD Est & Trusts Code § 8-106 (2013) What's This? You and your loved ones will have better peace of mind when your time comes. The answer is no, because funeral and burial expenses are not considered qualified healthcare expenses.īe sure to name an HSA beneficiary. You may be wondering if you can use your HSA to pay for your funeral or burial expenses. Your account will be included in your estate. If the estate is the beneficiary, then the total distribution is in included on the deceased HSA owner’s (your) final tax return.* If you have an estate, you may also choose to name your estate as your HSA beneficiary. There is one caveat: the non-spouse beneficiary can reduce the taxable amount by paying for any qualified medical expenses for the deceased (you) within one year of your death. The non-spouse beneficiary assumes full responsibility and the entire account balance is taxable in one year, which could be a huge tax hit for them. The person will have to claim the HSA funds on their taxes in the year of your death. ![]() If you decide to designate someone other than a spouse as beneficiary, the rules are much different. Naming a Child or Other Person as Beneficiary If they do have an HDHP, then the spouse can also contribute to the newly acquired HSA. They can use account balance for qualified healthcare expenses without being taxed, even if they are not enrolled in a HDHP. If you’re married and name your spouse as beneficiary, he or she will take over the HSA in their name and it will become their own. However, the rules apply differently for different types of relationships. You can choose Aunt Sally, Cousin Ed, or anyone else you want to have the money. ![]() Your beneficiary does not have to be your spouse or child. Just like a 401(k), IRA, or other retirement account, the money can be passed on. With that in mind, you need to prepare for when the Grim Reaper comes calling.Īs an HSA account holder, you need to name a beneficiary for your Health Savings Account. With tax-free growth, investment options, and rollover, your HSA can grow to a pretty sizeable balance. HSAs don’t have a “use it or lose it” policy, like with some Flexible Spending Accounts. Second, year after year, your account balance rolls over, meaning that any money that wasn’t spent stays in the account. First, the triple tax advantage of tax-free contributions, tax-free withdrawals for qualified expenses, and tax-free interest and investment income makes them very valuable. Health Savings Accounts are very popular and with good reason. If you name an HSA beneficiary now, there will be one less thing to worry about. Whether you have only recently signed up for an HSA or have had one for years, you need to know what happens to your HSA when you die. Plus, the HSA is owned by the account holder and stays with that person for the life of the account, even if they switch companies or retire. HSAs are great for saving money on taxes and healthcare expenses. As enrollment in high deductible health plans grows, so does the number of people with a Health Savings Account (HSA).
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