Overview
Lively is a leading modern Health Savings Account (HSA) and Flexible Spending Account (FSA) provider known for its user-friendly digital platform. When an account holder passes away, the estate representative or named beneficiary must notify Lively to initiate the distribution of HSA funds.
The process for closing a Lively HSA depends heavily on who is named as the beneficiary. Spouses can often assume the account as their own, while non-spouse beneficiaries (or the estate) must take a taxable distribution.
This guide covers Lively's notification process, the specific documents required for HSA distributions, and what to expect regarding taxes and timelines.
This guide provides informational guidance only. It is not legal advice, and SwiftProbate is not a law firm. Laws and institutional procedures change — verify current requirements directly with Lively and consider consulting a qualified attorney.
Notification Process
How to Notify Lively of a Death
Step 1: Gather Initial Information
Before contacting Lively, have the following ready:
- Decedent's full legal name and date of birth
- Date of death
- Social Security number
- Account number (if known)
- Your name and relationship to the decedent
- A certified copy of the death certificate
Step 2: Contact Lively Support
Lively handles estate matters through their primary support team, which will escalate the case to their operations department.
- Phone: (888) 576-4837
- Hours: Mon–Fri, 6 AM – 6 PM PT
- Email: support@livelyme.com
When you reach an agent, inform them that the account holder has passed away. They will:
- Verify the decedent's identity
- Place a deceased flag on the account to freeze contributions and distributions
- Verify the named beneficiary on file
- Send you the Beneficiary Distribution Request form (usually via email or secure message)
Step 3: Submit Required Documents
Complete the form provided by the support team and mail it along with the death certificate to Lively's processing center.
Mail to:
Lively, Inc.
Attn: Estate Services
950 Mason St. #1355
San Francisco, CA 94108
Note: Lively may offer a secure upload link for certain documents. Ask the support agent if this option is available to speed up processing.
Step 4: Wait for Processing
After Lively receives your documents, expect:
- Document review: 3–5 business days
- Funds distribution: 5–10 business days after approval
Step 5: Receive Funds
- Spouse Beneficiary: The HSA is transferred to your name and remains an HSA.
- Non-Spouse Beneficiary: The account is closed, and a check or wire is issued. The fair market value of the account as of the date of death is taxable income to the beneficiary.
- Estate: If no beneficiary is named, funds are paid to the estate and included in the decedent's final tax return.
Required Documents
Documents Lively Requires
The documents needed depend on who is claiming the HSA funds.
Always Required
| Document | Details |
|---|---|
| Certified death certificate | One certified copy |
| Government-issued photo ID | Of the person claiming the account |
| Beneficiary Distribution Request Form | Provided by Lively support upon notification |
If There Is No Beneficiary (Estate Claim)
| Document | Details |
|---|---|
| Letters Testamentary / Administration | Issued by the probate court appointing the executor |
| EIN (Employer Identification Number) | For the estate (required for tax reporting) |
If the Beneficiary is a Trust
| Document | Details |
|---|---|
| Trust Certification | Proving the trust's existence and trustee's authority |
| Trustee's ID | Government-issued photo ID |
Account Types
How Lively Handles HSA Distributions
HSA rules are set by the IRS and handled differently than standard bank accounts.
Spouse Beneficiary
If the spouse is the designated beneficiary, the HSA is treated as the spouse's own HSA.
- No taxes are due immediately.
- The spouse can use funds for their own qualified medical expenses.
- Timeline: 3–7 business days to transfer ownership.
Non-Spouse Beneficiary
If anyone other than a spouse (child, sibling, friend) inherits the HSA:
- The account ceases to be an HSA on the date of death.
- The fair market value of the account is distributed to the beneficiary.
- The distribution is taxable income to the beneficiary in the year of death.
- Timeline: 5–10 business days for check issuance.
Estate (No Beneficiary)
If no beneficiary was named:
- The account ceases to be an HSA.
- Funds are paid to the decedent's estate.
- The value is included on the decedent's final income tax return.
- Timeline: 2–4 weeks (requires probate documents).
Flexible Spending Accounts (FSA)
FSAs typically have a "use it or lose it" rule.
- Claims for expenses incurred before death can usually be submitted by the estate.
- Unused funds may be forfeited depending on the employer's plan rules.
- Contact the decedent's employer HR department in addition to Lively.
State Considerations
How Your State Affects the Lively Process
Lively operates nationally, but probate and tax laws vary by state.
- Probate Requirement: If the HSA has no beneficiary, it becomes part of the probate estate. State "small estate" limits determine if you need full court administration.
- State Taxes: While HSAs are federally tax-free, some states (like California and New Jersey) may tax HSA earnings or contributions.
- Community Property: In states like Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, a spouse may have a claim to HSA funds even if not named as the beneficiary.
Key State Variations
| State | Small Estate Threshold | Community Property? | Notable Rules |
|---|---|---|---|
| California | $184,500 | Yes | HSAs are not tax-advantaged for state income tax |
| New Jersey | $50,000 (spousal) | No | HSAs are not tax-advantaged for state income tax |
| Texas | $75,000 | Yes | Community property laws apply to marital assets |
For detailed probate requirements, see our state and county probate guides.
Timelines
How Long Lively Takes to Release Funds
| Account Type | Estimated Timeline | Key Factor |
|---|---|---|
| Spouse Beneficiary | 3–7 business days | Simple account ownership transfer |
| Non-Spouse Beneficiary | 5–10 business days | Account closure and check issuance |
| Estate (Probate) | 2–4 weeks | Requires review of court documents |
| Small Estate Affidavit | 2–4 weeks | Varies by state requirements |
Note: Timelines start once Lively receives all correct documents.
Tips & Pitfalls
Common Pitfalls and Tips
Do Not Use the HSA Card After Death
Using the decedent's HSA debit card after their date of death is considered an unqualified distribution and can lead to tax penalties and legal issues.
Understand the Tax Bill
For non-spouse beneficiaries, the entire value of the HSA is taxable income. Set aside a portion of the distribution to pay income taxes when you file your return.
Submit Medical Expenses Quickly
In some cases, the beneficiary or estate can pay the decedent's outstanding medical expenses from the HSA within 1 year of death to reduce the taxable amount. Keep all receipts.
Check for Employer Contributions
If the HSA was employer-sponsored, check if any final payroll contributions were pending. Wait for these to post before closing the account.
Keep the Case Number
Lively support will assign a ticket or case number. Keep this handy for all follow-up calls.