You spent time and money getting your will in place. You made thoughtful decisions about who should receive what. But here’s something most people don’t realize: your will might not control everything.

That’s because some of your most valuable assets—like retirement accounts, life insurance policies, and bank accounts—often pass by beneficiary designation, not through your will. And if your beneficiary designations are out of date or inconsistent with your estate plan, your wishes might not be honored.

Here’s what you need to know to make sure everything works together.

What Is a Beneficiary Designation?

A beneficiary designation is a form you fill out (often when you open an account or policy) that tells the company who should receive the funds when you pass away.

You’ll typically find these on:

• Life insurance policies
• Retirement accounts (401(k)s, IRAs, etc.)
• Transfer-on-death (TOD) or payable-on-death (POD) bank or investment accounts
• Some annuities or brokerage accounts

Here’s the Big Pitfall

These assets pass directly to the named beneficiary, regardless of what your will or trust says.

That means if your will leaves everything to your children equally—but your old 401(k) still names your ex-spouse as the beneficiary—they’ll get that account. No questions asked.

It also means that if one child is listed as the beneficiary on your life insurance, but your will says your kids should split everything evenly, that one child legally gets the full payout. It doesn’t matter what your will says. And your other children have no legal recourse to get any portion of the life insurance benefit.

Why This Happens So Often

It’s incredibly common for people to forget to update beneficiary designations.

• You may have opened the account years ago, before your current relationship or family structure.
• You may have assumed your will would override everything.
• You may not remember what you wrote down—or never designated anyone at all.

Financial institutions are bound to follow the form they have on file. If there’s a conflict between that and your estate plan, the form usually wins.

How to Avoid This Mistake

The good news? This is easily preventable. Here’s what we recommend:

1. Review your beneficiary designations regularly

Make a list of your accounts with named beneficiaries and double-check each one. Look at life insurance, retirement accounts, and any accounts you’ve made TOD or POD.

2. Coordinate with your estate plan

When we work with estate planning clients at Lester Law, we walk through each asset to make sure your beneficiary designations align with your broader plan. For example, if your will creates a trust for your minor children, we might recommend you update your beneficiary form to name that trust rather than leaving assets outright.

3. Don’t assume “no designation” means your will controls

If you leave a beneficiary section blank or list “estate,” that can sometimes create more confusion (or unintended tax consequences). It’s best to talk with your attorney about the cleanest way to align everything.

Bonus Tip: Be careful with joint accounts

Just like beneficiary designations, joint accounts pass automatically to the surviving owner—even if your will says something different. If you’ve added someone to a bank account “for convenience,” make sure it doesn’t accidentally override your estate plan.

Your Estate Plan Should Work Seamlessly

A good estate plan doesn’t live in a vacuum. It connects with your real-life assets and that means checking what your beneficiary forms say and making sure nothing contradicts.

At Lester Law, we help you bring everything into alignment so your plan does what you intended, with no surprises.

Want help reviewing your beneficiary designations? We’re here to make that step simple and stress-free. Contact us to get started.

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This website includes information about legal issues. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. You should contact an attorney for advice on your specific legal problems.