Beneficiary designations: the 6 mistakes that override your will
Why retirement accounts and life insurance pass outside your will, and the six beneficiary mistakes — ex-spouses, minors, no contingent, estates, unequal shares, never confirming — that cost families the most.
A will governs what a will governs. Retirement accounts, life insurance, annuities and payable-on-death bank accounts go to whoever is written on the beneficiary form — even if your will says otherwise, and even if the form is twenty years old.
The six mistakes
- An ex-spouse still listed. Some states revoke this automatically on divorce; federal-law plans (401(k)s under ERISA) do not.
- Naming a minor directly. Insurers can't pay a child; a court appoints a guardian for the money. Use a trust or a UTMA custodian instead.
- No contingent beneficiary. If the primary dies first, the asset falls into probate — the thing the form was meant to avoid.
- Naming 'my estate'. This forces probate and, for retirement accounts, can accelerate income taxes.
- Shares that don't add up, or 'per stirpes' left unchecked when a child has predeceased.
- Never confirming. You assume the form on file matches your memory; the institution's records say otherwise.
The fix: an annual 20-minute review
- List every account and policy that carries a beneficiary.
- Request or download the current designation on file — not what you remember.
- Check primary + contingent, shares total 100%, no minors named outright, names match your current family.
- Keep the confirmation letter from the institution with the account record.
Run your first beneficiary check.
Create your vault- Retirement topics — Beneficiary · IRS
- Publication 590-B — Distributions from IRAs (inherited IRA rules) · IRS
- Transfer on death (TOD) registration · Investor.gov (U.S. SEC)
- Life Insurance Policy Locator · National Association of Insurance Commissioners
Where this guide states a rule, deadline or dollar figure, it comes from one of the references above. Links open the primary source so you can check the current wording.
This guide is general information about personal records and planning, not legal, tax or financial advice. Laws vary by state; talk to a licensed professional about your situation.
