What happens to the money in my HSA when I die?

It depends on who you named as the beneficiary. If your spouse is designated as the beneficiary, your spouse is eligible to become the owner of the HSA. If the beneficiary is someone other than your spouse, the HSA funds are distributed to that beneficiary. If no beneficiary is designated, the funds become part of your estate.

HSA funds distributed to a non-spouse beneficiary or your estate are considered taxable income.