Can a Spouse Give Their HSA to the Other? Understanding HSA Transfer between Spouses

Health Savings Accounts (HSAs) are a valuable tool for individuals and families to save for medical expenses tax-free. One common question that arises is whether a spouse can give their HSA to the other.

When it comes to transferring an HSA between spouses, the process is not as straightforward as simply gifting the account from one spouse to the other. Here are some key points to consider:

• Spousal Beneficiary Designation: If one spouse passes away, the HSA can be transferred to the surviving spouse tax-free by designating them as the beneficiary.
• Rollover: While spouses cannot directly transfer their HSA to each other, they can rollover the funds tax-free by withdrawing the money from one HSA and contributing it to the other HSA within 60 days.
• Contribution Limits: It's important to be mindful of contribution limits when transferring funds between HSAs to avoid exceeding the annual contribution limit set by the IRS.
• Tax Implications: Properly executing the rollover process is crucial to avoid any tax implications or penalties.

Ultimately, while a spouse cannot directly give their HSA to the other, there are ways to transfer funds between HSAs legally and efficiently.

Health Savings Accounts (HSAs) are an incredibly useful financial tool, allowing individuals and families to set aside money for medical expenses without paying taxes on it. A common scenario that arises involves the question: Can a spouse transfer their HSA to their partner? Although it might seem like a simple solution, there are several important factors to consider.

For instance, if a spouse wishes to transfer their HSA, it's important to understand that this is not as straightforward as gifting the account. Here are the essential points to keep in mind:

• Spousal Beneficiary Designation: If one partner passes away, the funds within the HSA can be transferred tax-free to the surviving spouse, provided they were designated as the beneficiary.
• Rollover Option: While direct transfers between spouses aren't permitted, a couple can utilize the rollover option. This requires withdrawing funds from one HSA and depositing them into another HSA within a 60-day window, allowing for a tax-free transition.
• Contribution Limits: It's also crucial to keep contribution limits in mind—exceeding the IRS's annual limits can result in penalties, so careful tracking is needed when moving HSA funds.
• Tax Implications: To prevent any unwanted tax consequences or penalties, adhering to the proper rollover process is vital.

So, while one spouse can't transfer their HSA directly, the rollover method provides a way to share funds from one account to another effectively and legally.