Does a pension continue to a surviving spouse?

Often yes, and for private-sector plans covered by ERISA that protection is built into federal law rather than left to the plan's discretion. Under 29 U.S.C. section 1055, a covered plan must pay a vested participant's benefit as a qualified joint and survivor annuity if the participant survives to the annuity starting date, and must provide a qualified preretirement survivor annuity to the surviving spouse if the participant dies before it. A qualified joint and survivor annuity is one where the survivor annuity for the spouse's life is "not less than 50 percent of (and is not greater than 100 percent of) the amount of the annuity which is payable during the joint lives" of the two of them. The critical caveat is that this default can be waived -- but only with the spouse's written consent, witnessed by a plan representative or a notary public. So the real answer for any specific pension is: what election was made at retirement, and did the spouse consent to give up the survivor benefit? Only the plan administrator can tell you.

What happens to a pension if there is no surviving spouse?

Frequently nothing is payable, and this is the single most common surprise in this area. A traditional defined-benefit pension is a promise to pay an income stream for a life or lives, not an account balance with a residual value. If the participant elected a single-life annuity and then died, the obligation ends -- there is no balance for the estate to collect and nothing for children to inherit. Some plans do pay something: a period-certain election that has not run out, a lump-sum death benefit written into the plan, a return of the participant's own contributions in a contributory plan, or a final payment covering the period up to the date of death. These are plan-specific, not universal. Request the summary plan description and the participant's benefit election form and read what was actually elected before you tell beneficiaries to expect anything.

How long does a beneficiary have to empty an inherited annuity?

For a non-qualified annuity -- one not held inside an IRA or employer plan -- the outer limit under Internal Revenue Code section 72(s) is five years. If the holder dies before the annuity starting date, the contract must provide that "the entire interest in such contract will be distributed within 5 years after the death of such holder." If the holder dies on or after the annuity starting date, the remaining interest must be "distributed at least as rapidly as under the method of distributions being used as of the date of his death." There are two important alternatives. A designated beneficiary may instead take distributions over their own life expectancy if payments begin within one year of the holder's death. And under section 72(s)(3), if the beneficiary is the holder's surviving spouse, the rules are applied by treating the spouse as the holder of the contract -- which effectively lets the spouse continue the contract instead of liquidating it. Annuities held inside an IRA or 401(k) follow the retirement account rules instead.

Can a non-spouse HSA beneficiary reduce the tax by paying medical bills?

Yes, within a strict one-year window, and it is the one planning move available after the fact. Section 223(f)(8)(B) provides that the amount includible in gross income "by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent's death and paid by such person within 1 year after such date." Two conditions both have to be met: the expense must have been incurred by the deceased person before they died, and the beneficiary must pay it within one year of the death. So if there are unpaid final medical bills -- and after a long illness there usually are -- the beneficiary paying those bills out of pocket within twelve months reduces the taxable amount dollar for dollar. The statute also allows an appropriate deduction under section 691(c) where estate tax was paid on the amount. This is worth raising with a tax preparer early, because the clock starts at the date of death, not at the date anyone gets around to it.

Do pensions, annuities, and HSAs go through probate?

Usually not, if a living beneficiary is named -- and that is exactly why they are easy to miss. A pension survivor annuity, an annuity contract death benefit, and an HSA with a named beneficiary all pass by contract directly to the named person, outside the will and outside the probate estate. They still belong on the estate inventory in most states as information, and they matter for tax reporting even when they never touch the probate estate. Where they do fall into probate is when the designation has failed: no beneficiary was ever named, the named beneficiary died first with no contingent named, or the estate itself was named as beneficiary. In those cases the money is payable to the estate, and it needs letters of appointment and an estate account to collect it -- which is also the scenario with the worst tax result for an HSA.

Pensions, Annuities & HSAs After Death

Q: Is an inherited HSA taxable?

It depends entirely on who the beneficiary is, and for anyone other than a spouse the answer is unusually harsh. Under Internal Revenue Code section 223(f)(8), if the surviving spouse is the designated beneficiary, the account "shall be treated as if the spouse were the account beneficiary" -- it simply becomes the spouse's own HSA, with no tax at death. If anyone else is the beneficiary, "such account shall cease to be a health savings account as of the date of death," and the fair market value of the assets on that date is includible in that person's gross income for the tax year that includes the date of death. Not spread over ten years, not deferred -- income in a single year. If the estate is the beneficiary, that amount is includible in the decedent's gross income for their last taxable year instead. There is one meaningful offset, described in the next answer.

Three Assets, Three Completely Different Rulebooks

When a beneficiary form says "retirement," people assume the rules are the same everywhere. They are not. A defined-benefit pension, an annuity contract, and a health savings account behave nothing alike after a death:

A pension may pay a surviving spouse for life automatically, by force of federal law -- or pay nothing at all to anyone, depending on a single election made years earlier.
An annuity is a contract. What happens next is whatever the contract says, constrained by a federal tax rule that sets an outer deadline.
An HSA is the harshest of the three for anyone other than a spouse: it stops being an HSA on the date of death and becomes taxable income to the beneficiary in that year, all at once.

Notably absent from this guide: IRAs and 401(k) balances. Those follow the SECURE Act rules and the ten-year rule, which are a different system entirely and covered in inherited IRA rules in 2026. If the asset in front of you is an IRA or a 401(k) account balance, start there. If it is a monthly pension check, an annuity contract, or an HSA debit card, you are in the right place.

Attorney rules vary by state

A handful of states require a licensed attorney to administer probate — Arkansas, Illinois, Mississippi, and South Dakota, plus (for most estates) Florida, Louisiana, Missouri, Texas, and Wisconsin; California and New York generally let you handle routine administration yourself but require an attorney for contested matters; Indiana and Tennessee depend on the county. Check your state probate guide before assuming you can handle everything yourself.

Step Zero: Find Out What Actually Existed

You cannot claim a benefit you do not know about, and none of these three assets reliably announces itself. Nobody mails the executor a list.

Start with paper and tax returns. The prior two or three years of federal returns are the highest-yield source in the house. A Form 1099-R means a pension, annuity, or retirement distribution was being paid and names the payer. A Form 1099-SA or Form 8889 means an HSA existed. A Form 5498-SA shows HSA contributions. Bank statements showing a recurring monthly deposit from a company name nobody recognizes is very often a pension or an annuity. The broader document hunt is covered in how to find tax documents for a deceased person and how to find a deceased person's bank accounts.

Then work the employment history. For anyone who worked in the private sector before the 1990s, a defined-benefit pension is a real possibility even if nobody in the family remembers one. Old employers get acquired, spun off, renamed, and dissolved, and the pension obligation follows a chain that is not obvious from the outside.

Two public searches are worth running:

PBGC's unclaimed pension search. The Pension Benefit Guaranty Corporation holds unclaimed benefits for people who were not paid when their retirement plan ended, and its search of unclaimed pensions covers participants, alternate payees, and beneficiaries from terminated private-sector plans it now administers. You search by last name and the last four digits of the Social Security number.
The DOL Retirement Savings Lost and Found. SECURE 2.0 directed the Department of Labor to build a searchable database of workplace retirement plan participants, now live at lostandfound.dol.gov. Read the access requirements before you rely on it: it requires identity verification through an ID-proofed Login.gov account, which is built around verifying the searcher's own identity. That makes it a strong tool for a living person looking for their own lost plan and an awkward one for an executor searching on behalf of someone who has died.

Then state unclaimed property. Uncashed pension checks and matured annuity proceeds are classic escheated property. Search every state the person lived or worked in, not just the last one.

Ask the question out loud, to everyone

"Did they ever mention a pension from an old job?" is worth asking every sibling, the surviving spouse, and any long-time friend separately. In a surprising number of estates one person remembers a detail -- a union, a plant, a railroad, a school district -- that turns into a real benefit.

Defined-Benefit Pensions

A traditional pension is a promise of an income stream, not a pot of money. That single distinction drives everything that follows, including the most painful outcome: a pension can simply end at death with nothing payable to anyone.

ERISA's built-in spouse protection

For private-sector plans covered by ERISA, Congress did not leave survivor benefits to the plan's discretion. 29 U.S.C. § 1055 requires a covered plan to provide that a vested participant who survives to the annuity starting date receives their benefit "in the form of a qualified joint and survivor annuity," and that if a vested participant dies before the annuity starting date leaving a surviving spouse, "a qualified preretirement survivor annuity shall be provided to the surviving spouse."

The definitions have teeth:

A qualified joint and survivor annuity (QJSA) pays for the participant's life with a survivor annuity for the spouse's life that is "not less than 50 percent of (and is not greater than 100 percent of) the amount of the annuity which is payable during the joint lives," and is the actuarial equivalent of a single life annuity for the participant.
A qualified preretirement survivor annuity (QPSA) covers death before retirement. For an individual account plan, the statute describes it as "an annuity for the life of the surviving spouse the actuarial equivalent of which is not less than 50 percent" of the participant's vested account balance.

The waiver is the thing to check

Here is where estates get their bad news. That protection can be waived, but not unilaterally. Under section 1055(c)(2), an election out is only effective if "the spouse of the participant consents in writing to such election," acknowledging its effect, and that consent is "witnessed by a plan representative or a notary public" -- or if it is established that there is no spouse, the spouse cannot be located, or another circumstance prescribed by regulation applies.

In practice this means a married participant who retired on a single-life annuity, at a higher monthly payment, did so with a signed and witnessed spousal waiver on file. When that participant dies, the higher payment stops and nothing continues. The surviving spouse is sometimes genuinely unaware they signed it, sometimes decades earlier. It is a hard conversation, and it is better had after you have read the election form than before.

So the operative question for any pension is not "does a pension continue?" but "what was elected, and what did the spouse consent to?"

Get the plan documents -- you have a statutory right to them

You do not have to rely on what a call center tells you. 29 U.S.C. § 1024(b)(4) requires that the administrator, "upon written request of any participant or beneficiary, furnish a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated."

And there is a consequence for ignoring the request. Under 29 U.S.C. § 1132(c)(1), an administrator who fails or refuses to mail the requested material within 30 days of the request may, in the court's discretion, be "personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such failure or refusal" -- a statutory figure the Department of Labor adjusts for inflation. You will rarely need to invoke this. Citing the statute in a written request is often enough to move a file.

Put the request in writing, keep the date, and ask specifically for: the summary plan description, the participant's benefit election form and any spousal consent, the plan's death benefit provisions, and a written statement of what is payable and to whom.

Claim deadlines run both ways

ERISA's claims procedure regulation sets outer limits on how long a plan may take. For an ordinary pension claim, the plan administrator must notify the claimant of an adverse benefit determination "within a reasonable period of time, but not later than 90 days after receipt of the claim," extendable once by up to another 90 days for special circumstances with advance written notice. On appeal of a denial, the determination is due "not later than 60 days after receipt of the claimant's request for review," similarly extendable once (29 C.F.R. § 2560.503-1).

If you are past those windows with no answer, you are not being impatient. Follow up in writing and reference the regulation.

Not every pension is an ERISA pension

This is a large exception and it catches people constantly. ERISA Title I does not apply to a governmental plan or to a church plan for which no election has been made under section 410(d) of the tax code, among other exclusions (29 U.S.C. § 1003(b)).

So a state teachers' retirement system, a municipal police or fire pension, a federal retirement system, and many church-affiliated hospital and school plans are outside the federal protections described above. They generally have their own survivor rules -- sometimes more generous than ERISA's, sometimes less -- set by state statute or plan charter rather than by ERISA. Do not apply the QJSA/QPSA analysis to them. Go to that system's own survivor benefit rules and its own forms.

If the plan was terminated: PBGC

When a covered private-sector defined-benefit plan fails, PBGC generally takes it over and pays benefits subject to statutory limits. If that is the situation, PBGC becomes the administrator you deal with.

PBGC asks that a death be reported as soon as possible by calling its customer contact center at 1-800-400-7242, and a certified copy of the death certificate is required. For an executor or estate administrator specifically, PBGC's guidance for executors says it will request a copy of the death certificate, proof of your appointment as executor or estate administrator, a form with basic information about the deceased person, and the estate's preferred payment method. After the death is reported, PBGC reviews the participant's file to determine whether survivor benefits are due and contacts the people eligible to receive them. Its executor guidance notes that "in some cases, an executor or personal representative of an estate may be able to collect pension-related payments owed to the deceased person."

You will need certified copies of the death certificate and letters testamentary or letters of administration for essentially all of this.

Stop the payments, and do not spend the ones that arrive after the date of death

Direct deposits often continue for a cycle or two after a death. A payment covering a period after the date of death is generally recoverable by the plan under its own terms, and plans and agencies do ask for it back. Notify every payer promptly, leave those funds where they are, and ask the administrator in writing how they want the overpayment returned. Reconciling this months later, after the money has been distributed to heirs, is significantly worse.

Annuities

An annuity is a contract with an insurance company. After a death, three questions decide everything.

Question 1: Is it qualified or non-qualified?

A qualified annuity is one held inside an IRA, a 403(b), or an employer plan. The retirement account distribution rules govern it -- go to inherited IRA rules in 2026.
A non-qualified annuity was bought with after-tax money and sits outside any retirement account. Internal Revenue Code section 72(s) governs it, and that is what this section covers.

Look at the account title and the Form 1099-R, and if it is ambiguous, ask the insurer in writing which it is. The answer changes the deadline.

Question 2: Had payments started?

IRC § 72(s) requires a non-qualified annuity contract to provide for distribution on the holder's death, and it splits on the annuity starting date:

Death before the annuity starting date -- the contract must provide that "the entire interest in such contract will be distributed within 5 years after the death of such holder."
Death on or after the annuity starting date -- the remaining portion must be "distributed at least as rapidly as under the method of distributions being used as of the date of his death."

The statute also permits a designated beneficiary to take distributions over their own life expectancy instead, provided distributions begin within one year of the holder's death. That "within one year" condition is easy to blow past while an estate is getting organized, and missing it can force the five-year treatment. If a beneficiary wants the stretch, act on it early.

Question 3: Who is the beneficiary?

If the beneficiary is the surviving spouse, section 72(s)(3) changes the answer completely: "If the designated beneficiary referred to in paragraph (2)(A) is the surviving spouse of the holder of the contract, paragraphs (1) and (2) shall be applied by treating such spouse as the holder of such contract." The spouse steps into the owner's shoes and the contract continues; no liquidation deadline is triggered by the death.

If the beneficiary is anyone else, the five-year or life-expectancy machinery applies. If the beneficiary is the estate, the money is payable to the estate, requires letters to collect, and the life-expectancy option is generally unavailable because an estate has no life expectancy.

The tax result: ordinary income, and no step-up

The one thing beneficiaries of annuities are most often wrong about is basis. Most inherited property gets a new basis equal to its value at death. Annuities largely do not, because the untaxed growth is income in respect of a decedent, and IRC § 1014(c) says plainly: "This section shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691."

Practically, that means the gain inside the contract -- the excess of value over the premiums paid -- is ordinary income to whoever receives it, taxed at their rate, in the year received. There is no capital gains treatment and no basis reset. It is the same mechanism described in income in respect of a decedent, and it is why a large annuity distribution can push a beneficiary into a much higher bracket if it is all taken in one year.

Also check the contract for features that only exist in annuities: a guaranteed death benefit rider, a period-certain election with payments remaining, a joint and survivor payout already in force, and any surrender charge that may or may not be waived at death. The insurer's death claim packet will name these; read it rather than assuming.

Health Savings Accounts

HSAs are small relative to pensions and annuities, and they produce a disproportionate number of unpleasant tax surprises. The rule is in IRC § 223(f)(8), and it turns entirely on who the designated beneficiary is.

If the spouse is the beneficiary: nothing happens

"If the account beneficiary's surviving spouse acquires such beneficiary's interest in a health savings account by reason of being the designated beneficiary of such account at the death of the account beneficiary, such health savings account shall be treated as if the spouse were the account beneficiary."

It becomes the spouse's own HSA. No income, no deadline, no distribution requirement. The spouse can use it for qualified medical expenses going forward exactly as the original owner could. This is the best outcome available and it depends on the beneficiary form having been filled out.

If anyone else is the beneficiary: fully taxable now

"[S]uch account shall cease to be a health savings account as of the date of death, and an amount equal to the fair market value of the assets in such account on such date shall be includible if such person is not the estate of such beneficiary, in such person's gross income for the taxable year which includes such date."

Read that carefully. The account stops being an HSA on the date of death. The entire fair market value as of that date is income to the beneficiary in the tax year containing the date of death. There is no ten-year spread, no rollover to the beneficiary's own HSA, and no way to defer it. A child inheriting a $60,000 HSA has $60,000 of additional ordinary income in one year. The IRS states the same rule plainly in Publication 969.

If the estate is the beneficiary, the statute routes it differently: the amount is includible "in such beneficiary's gross income for the last taxable year of such beneficiary" -- that is, on the deceased person's final income tax return. See how to file taxes for a deceased person.

The one-year medical expense offset

This is the only lever available after the fact, and it is time-limited. Section 223(f)(8)(B) provides that the amount includible "by any person (other than the estate) shall be reduced by the amount of qualified medical expenses which were incurred by the decedent before the date of the decedent's death and paid by such person within 1 year after such date." The statute also allows an appropriate deduction under section 691(c).

Both conditions must hold: the expense was incurred by the deceased person before death, and the beneficiary pays it within one year of the death. After a final illness there are often substantial unpaid provider bills sitting in a drawer. A non-spouse beneficiary who pays those bills within twelve months reduces their taxable amount dollar for dollar.

Three practical consequences:

Collect every final medical bill before you pay anything, and get itemized statements with dates of service. You need to be able to show the expense was incurred before death.
Do not wait. The window runs from the date of death. An estate that takes ten months to get organized has two months of usable runway left.
Coordinate with the estate. If the estate pays the bill, the beneficiary's reduction is not available for that expense. Decide deliberately who pays which bills, and involve a tax preparer before the money moves. Medical bills are also a claim against the estate in their own right -- see what debts are forgiven at death.

Check the HSA beneficiary form early, not late

An HSA is the one asset in this guide where the beneficiary designation can swing the tax bill by tens of thousands of dollars, and where nothing can be done about it after death. If you are reading this as part of someone else's estate, request the beneficiary designation from the custodian in the first week, and ask explicitly whether one is on file at all. If no valid designation exists, the account defaults to the estate -- which is the worst of the three tax outcomes. Institution-specific notification steps for HSA custodians, retirement providers, and annuity companies are in our institution guides.

What Goes Through Probate and What Does Not

Asset	With a living named beneficiary	With no valid beneficiary
Defined-benefit pension	Survivor annuity paid directly to the spouse or named beneficiary; outside probate	Often nothing is payable at all; any final payment due goes to the estate
Non-qualified annuity	Death benefit paid to the named beneficiary by contract; outside probate	Payable to the estate; letters required to collect; five-year rule applies
HSA	Spouse takes it over as their own; non-spouse takes it as income, outside probate	Payable to the estate; value taxed on the decedent's final return

Two takeaways from that table. First, most of this money never touches the probate estate, which is exactly why it gets missed -- there is no court filing that forces you to notice it. List these assets on the estate inventory anyway, noting how each one passes, because the beneficiaries and the tax preparer both need the information.

Second, a failed beneficiary designation is what drags an asset into probate, and it is more common than people expect: no form was ever completed, the named beneficiary predeceased with no contingent, an ex-spouse is still named, or the form names "my estate." Request the designation in writing from every custodian and read it. Do not rely on what the family believes it says.

A Working Sequence

Pull the last three years of tax returns and list every Form 1099-R, 1099-SA, 5498-SA, and Form 8889.
Scan twelve months of bank statements for recurring deposits and for HSA or insurer debits.
Build the employment history, including pre-1990s employers, and note unions and public employers.
Run the PBGC unclaimed pension search and the relevant state unclaimed property searches.
For each payer found, notify them in writing of the death; ask for a death claim packet and the beneficiary designation on file.
For each ERISA pension, make a written request under section 1024(b)(4) for the summary plan description, the benefit election form, and any spousal consent.
Determine for every pension whether the plan is ERISA-covered or a governmental or church plan, because the survivor rules differ.
For each annuity, establish qualified vs. non-qualified, whether the annuity starting date had passed, and who the beneficiary is.
Calendar the deadlines that actually bite: one year from death for a life-expectancy election on an annuity; one year from death for the HSA medical expense offset; five years from death for a non-qualified annuity with a non-spouse beneficiary.
Stop every payment stream and quarantine any funds received for periods after the date of death.
Obtain certified death certificates and letters, and file each claim with the documents that payer specifies.
Record everything on the estate inventory with a note on how each asset passes, and hand the whole picture to the tax preparer before any money moves.

Where Professional Help Earns Its Cost

Most of this is legwork -- finding the plans, requesting the documents, filing the claims -- and an organized executor can do it. Three places are worth paying for.

A tax preparer or CPA, before any HSA or annuity money is distributed. The HSA one-year offset, whether an annuity beneficiary can still elect life-expectancy payments, the section 691(c) deduction, and how a large IRD distribution lands in someone's bracket are all decisions with a deadline and a dollar figure attached, and they are much cheaper to get right in advance than to fix afterward.

An attorney, where a survivor benefit is denied and the plan's reasoning looks wrong, where a beneficiary designation is disputed or was changed shortly before death, where a divorce decree or domestic relations order may affect who is entitled, or where a spousal waiver's validity is in question.

The plan administrator or insurer's own claims department, which is free and underused. They hold the documents that answer most of these questions, and a written request citing the statute usually produces them.

Bringing in professional help here is not an admission that the estate is beyond you -- it is a judgment call about a handful of specific, dated decisions, and having the plan documents, designations, and deadlines already in front of you is what makes that an informed decision rather than a guess.

How SwiftProbate Helps

SwiftProbate is probate task management software. It helps you understand what needs to happen in an estate, organize documents and assets in one place, and track what is done and what is still open.

Retirement-adjacent assets are a good illustration of why that structure matters. Each one is a small chain of dependent steps with its own paperwork and its own clock: find it, notify the payer, request the designation and the plan documents, determine which rulebook applies, file the claim, then get the tax treatment right before the money moves. SwiftProbate keeps the death certificates, letters, beneficiary designations, and claim correspondence attached to the estate rather than scattered across three inboxes, tracks each benefit as its own asset, and holds the one-year and five-year deadlines as tasks instead of as something you are trying to remember.

If you are earlier in the process, the step-by-step probate checklist lays out the overall sequence, and the estate inventory checklist shows where these assets fit alongside the rest of the estate.

SwiftProbate provides software to help navigate the probate process. SwiftProbate is not a law firm, does not provide legal advice, and is not a substitute for the advice of a licensed attorney. No attorney-client relationship is created by using this service. Probate laws vary by state and county.

Pensions, Annuities & HSAs After Death: Who Gets What