Family & Protection
When Did You Last Check Your Beneficiaries?
The form you filled out years ago may still be directing your assets — regardless of what your will says.
The form that overrides your will
Most people know they need a will. Fewer people realize that beneficiary designations on retirement accounts, life insurance policies, and certain bank accounts override the will entirely. If your 401(k) still lists your ex-spouse as the primary beneficiary, that is where the money goes — regardless of what your will says, regardless of your divorce decree, and regardless of your current wishes. Courts have consistently upheld beneficiary designations over conflicting estate documents.
When designations go stale
Beneficiary designations are set once and rarely revisited. They go stale when life changes: a divorce, a remarriage, the birth of a child, the death of a named beneficiary, or a significant change in your relationship with the person you originally named. Each of these events is a signal to review your designations — but most people do not have a system for doing that, so the review never happens.
The accounts that carry designations
The list is longer than most people expect. 401(k) and 403(b) plans. IRAs. Life insurance policies. Annuities. Health savings accounts. Payable-on-death bank accounts. Transfer-on-death brokerage accounts. Each of these has its own beneficiary form, filed separately with the institution that holds the account. A change to one does not affect the others.
Primary and contingent beneficiaries
Most accounts allow you to name both a primary beneficiary — who receives the assets first — and a contingent beneficiary — who receives them if the primary beneficiary has already died or disclaims the inheritance. Many people name a primary beneficiary and leave the contingent blank. If the primary beneficiary predeceases you and there is no contingent named, the assets may pass through your estate — potentially triggering probate and losing the tax advantages of a direct beneficiary designation.
Minor children as beneficiaries
Naming a minor child directly as a beneficiary creates a problem: minors cannot legally receive large sums of money. If a minor is named and the account owner dies, a court will typically appoint a guardian of the property to manage the funds until the child reaches adulthood — a process that is expensive, public, and not necessarily aligned with your intentions. Naming a trust as beneficiary, or using a custodial arrangement, is usually a better approach. This is a question for an estate planning attorney.
The review takes less than an hour
Log in to each account that carries a beneficiary designation. Confirm who is named as primary and contingent. Verify that the names and relationships still reflect your current wishes. Make updates where needed. This is not a complex task — but it is one that most people have not done recently, and the consequences of getting it wrong can be significant and irreversible.
Beneficiary designations are one of the simplest things to get right — and one of the most common things that are quietly wrong. A review takes less time than the problem it prevents.
If you cannot remember the last time you reviewed your beneficiary designations, that is a good reason to do it soon.
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