Many assets pass by beneficiary designation, not by will. If the two conflict, the beneficiary form usually wins.
Assets that use beneficiary forms
- Life insurance.
- Retirement accounts such as 401(k)s and IRAs.
- Payable-on-death bank accounts.
- Transfer-on-death securities and, in some states, real estate.
Why it matters
These assets go directly to the named beneficiary, outside probate, regardless of what your will says. An ex-spouse or a deceased person still listed on a form can cause problems.
Keep forms current
- List your accounts and who is named on each.
- Update after marriage, divorce, births and deaths.
- Name contingent beneficiaries.
- Avoid naming minors directly. Consider a trust or custodian.
- Give copies to your executor.
Special rules
Spouses may have legal rights to certain retirement plans, requiring consent to name someone else. Some states automatically revoke ex-spouse designations after divorce for some assets, but not all, so update the forms anyway.
Frequently asked questions
What if no beneficiary is named?
The asset usually goes to your estate and through probate.
Can a will change a beneficiary form?
No, the form generally controls.