200: Why Your Health Savings Account Needs a Beneficiary

We've reached a huge milestone here at Absolute Trust Counsel—drum roll, please—the launch of our 200th Absolute Trust Talk episode! What started as an idea while driving down the road after a guest appearance on a financial advisor's radio show has become a trusted resource for thousands of listeners over the years. Kirsten's dream was always to have a platform where she could share the expertise of smart professionals she knows—financial planners, accountants, insurance experts, and fellow attorneys—with anyone who could benefit from their knowledge, and to explore the myths, misconceptions, and commonly overlooked estate planning details. From all of us at Absolute Trust Counsel, we want to say THANK YOU! We are deeply grateful to everyone who watches, listens, comments, subscribes, and shares our slice of the airwaves.

And speaking of commonly overlooked details, in this celebratory episode, Kirsten continues her "Estate Planning Misses" series by tackling Health Savings Accounts. While HSAs offer valuable tax benefits, there's a simple estate planning step most HSA owners completely overlook—and skipping it could create unnecessary tax bills and legal headaches for the people you leave behind.

Kirsten explains why naming a beneficiary on your HSA is essential, what happens if you don't, and the critical difference between how spouses and non-spouses are treated. Unlike IRAs, non-spouse beneficiaries face an immediate tax hit that wipes out the account's value.

Time-stamped Show Notes:
0:00 Introduction
2:06 Kirsten's vision for educating listeners through expert knowledge
3:28 The pandemic pivot to video and thank you to the audience
5:27 Introduction to the Estate Planning Misses series
5:45 What Health Savings Accounts are and who qualifies for them--you need a high-deductible health insurance plan to participate
6:42 The tax advantages that make HSAs attractive: pre-tax contributions and tax-free spending on medical expenses
7:12 Why HSAs typically don't hold large amounts--the 2026 contribution limit is $4,400 for individuals, and balances roll over year to year
7:42 How HSAs are similar to IRAs: pre-tax money, annual contribution limits, and special treatment for surviving spouses
8:12 The critical difference: when non-spouse beneficiaries inherit an HSA, they immediately owe income tax on the entire balance--unlike IRAs
8:47 Why you must designate a death beneficiary on your HSA, even though it's not a large account
9:17 The spouse advantage: married HSA owners should always name their spouse as beneficiary to avoid tax consequences and legal complications
9:52 Making it easier for your executor or trustee: why proper beneficiary designation simplifies estate administration
10:17 The action step: if you have an HSA, check whether you've named a beneficiary--and if you haven't, you can do it today

Take the Next Step in Your Estate Planning Journey

If this episode resonated with you, we'd love to help you with your own estate planning needs in California. Schedule a complimentary discovery call with our team at Absolute Trust Counsel. During this no-obligation conversation, we'll:

1. Learn about your unique situation and goals
2. Answer questions about our services
3. Determine if we're the right fit to work together

Visit https://absolutetrustcounsel.com/scheduling/ or call 925-943-2740 to schedule your free discovery call today.

Follow and Review:

We’d love for you to follow us if you haven’t yet. Click that purple '+' in the top right corner of your Apple Podcasts app. We’d love it even more if you could drop a review or 5-star rating over on Apple Podcasts. Simply select “Ratings and Reviews” and “Write a Review” then a quick line with your favorite part of the episode. It only takes a couple second and it helps spread the word about the podcast.

Episode Credits: The Absolute Trust Talk podcast is brought to you with the help of Q2Mark, led by Chief Marketing Officer Susie Hays. Since 2016, Q2Mark has partnered with Absolute Trust Counsel on all marketing communications—from brand development and website design to this podcast series with over 192 episodes, social media management, video production, and more. If you're business owner looking for comprehensive marketing support, visit Q2Mark.com.