Merritt Personal Lines Manual: Death of the Archer MSA Holder
You should choose a beneficiary when you set up your Archer MSA. What happens to that Archer MSA when you die depends on whom you designate as the beneficiary.
Spouse is the designated beneficiary. If your spouse is the designated beneficiary of your Archer MSA, it will be treated as your spouse's Archer MSA after your death.
Spouse is not the designated beneficiary. If your spouse is not the designated beneficiary of your Archer MSA:
- The account stops being an Archer MSA, and
- The fair market value of the Archer MSA becomes taxable to the beneficiary in the year in which you die.
If your estate is the beneficiary, the fair market value of the Archer MSA will be included on your final income tax return.
The amount taxable to a beneficiary other than the estate is reduced by any qualified medical expenses for the decedent that are paid by the beneficiary within 1 year after the date of death.
