Estate Planning

Beneficiary Review: The Most Overlooked Financial Task

A beneficiary designation controls how your retirement accounts and life insurance pay out — completely bypassing your will. An outdated designation can overrid…

Estate Planning

Beneficiary Review.

The estate planning task most commonly overlooked — and most consequential.

A beneficiary designation controls how your retirement accounts and life insurance pay out — completely bypassing your will. An outdated designation can override everything else you've planned.

1 in 3estate planning disputes involve assets that passed contrary to the deceased's apparent wishes — most commonly due to outdated beneficiary designations that were never updated

The Situation

Why Beneficiaries Override Everything

Retirement accounts (401k, IRA, Roth IRA), life insurance policies, and many bank and brokerage accounts transfer directly to named beneficiaries upon death — completely outside the will, outside probate, and outside any other legal document. An ex-spouse named on a $300,000 IRA receives that $300,000 regardless of divorce proceedings, a new will, or a new marriage.

Your will is a legal document. Your beneficiary designation is a contract . The contract wins.
— Worthune Decision Framework

You haven't reviewed beneficiary designations on retirement accounts or life insurance in the past two years
You've experienced a major life event (marriage, divorce, birth, death of a named beneficiary) since you last set beneficiaries
You're unsure who is currently listed as beneficiary on your most significant financial accounts

About This FinBook

Beneficiary designations override your will. A missed update after divorce or death can send assets to the wrong person. Learn how to audit and update all designations.

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