You can have a perfect will and still send your retirement account to the wrong person. For most of your wealth, a one-page beneficiary form — not your will — decides who inherits.
The will you wrote isn’t the whole story
Most people think of the will as the master document — the thing that says who gets what. It is, but only for part of the estate. Your will controls assets that pass through probate: property titled in your name alone, personal belongings, a solo bank or brokerage account.
It does not control your 401(k), your IRA, your Roth, your life insurance, your annuities, or any account with a payable-on-death or transfer-on-death instruction. Those pass by beneficiary designation — a separate form on file with the custodian — and the designation beats the will every time.
For a lot of families, that’s not a footnote. Retirement accounts and life insurance are often the largest pieces of the balance sheet. Which means the document deciding where the majority of the money goes isn’t the one the lawyer drafted. It’s the form you filled out years ago and probably haven’t looked at since.
Why the beneficiary form wins
These are what the law calls non-probate transfers. The account doesn’t flow into the estate and get distributed by the will — it goes directly to whoever is named on the form. The custodian pays the named beneficiary. It doesn’t read your will, and in most cases it isn’t allowed to.
That’s efficient when the form is right. It’s a problem when it isn’t — because nothing in your will can fix it after the fact.
The mistakes that actually happen
The form is out of date. This is the big one. An ex-spouse still listed as beneficiary, a deceased parent, a child born after the form was signed and never added. For employer plans governed by federal law, courts have repeatedly required the plan to pay the named beneficiary — even an ex-spouse — regardless of a later divorce decree or will. Updating the form is the only fix.
No beneficiary, or the estate is named. Leave the form blank or name your estate, and the account usually lands in probate. For a retirement account, that’s worse than slow — it can collapse the payout window and accelerate the income tax, because an estate doesn’t get the favorable options an individual does.
A minor is named outright. A minor generally can’t legally receive a large account. Without a named custodian or an appropriate trust, a court may have to appoint a guardian to manage it — slow, costly, and rarely what the parent intended.
The SECURE Act 10-year rule is ignored. Since 2020, most non-spouse heirs must empty an inherited retirement account within 10 years. Under the 2024 final regulations now in effect, if you’d already started your required distributions, your heir also has to take annual withdrawals during that window. A handful of eligible beneficiaries — a spouse, a minor child, the disabled or chronically ill, someone close to your age — can still stretch withdrawals over a lifetime. Who you name directly shapes the tax bill they inherit.
The 401(k) spousal rule is overlooked. If you’re married, most 401(k) plans require your spouse to be the primary beneficiary unless your spouse signs a written, notarized waiver. You can’t simply name someone else. (IRAs generally don’t carry this requirement.)
What to actually do
The fix is unglamorous and fast. Pull every beneficiary form — retirement accounts, old 401(k)s from former employers, life insurance, annuities, HSAs, and any POD/TOD accounts — and confirm the primary and contingent beneficiaries are who you’d want today. Do it after every major life event: marriage, divorce, a birth, a death, a job change.
Then make sure the designations and the will actually agree with each other, and that neither one quietly undoes your estate plan. If a trust is part of the picture, whether a retirement account should name that trust is a real question with real tax consequences under the 10-year rule — one to work through with your estate attorney and CPA, not to guess at. Keep copies, and confirm with each custodian that the forms on file match what you intend.
Your estate plan is only as good as the forms nobody looks at — the beneficiary designations that quietly outrank your will.
The will gets the meeting, the signatures, the binder on the shelf. The beneficiary forms get ignored. But they’re the documents that move most of the money, and reviewing them is the highest-leverage, lowest-cost hour in estate planning. It’s also the one almost nobody schedules. Put it on the calendar.
Key takeaways
• Your will controls only probate assets; retirement accounts, life insurance, annuities, and POD/TOD accounts pass by beneficiary designation and override the will.
• For many families, those non-probate assets are the largest part of the estate — so the beneficiary form, not the will, directs most of the money.
• Out-of-date forms are the most common failure; for employer plans, courts generally require paying the named beneficiary even an ex-spouse.
• Naming your estate (or no one) usually forces probate and can accelerate the income tax on a retirement account.
• The SECURE Act 10-year rule means most non-spouse heirs must empty an inherited retirement account within 10 years — who you name shapes their tax bill.
• Review every primary and contingent designation after any major life event, and coordinate it with your will, trust, attorney, and CPA.
Common questions about beneficiary designations
Does my will override my beneficiary designations?
No — it’s the other way around. Accounts with a named beneficiary pass directly to that person and bypass the will entirely. Your will only controls assets that go through probate.
What happens if I never named a beneficiary?
The account follows the custodian’s default rules, which often send it to your estate and through probate. For a retirement account, that can also accelerate how quickly the money must come out and be taxed.
I got divorced — is my ex automatically removed?
Not necessarily, and this is where people get burned. For employer-sponsored plans governed by federal law, the plan generally must pay whoever is named on the form, even an ex-spouse. Update the form; don’t rely on the divorce decree.
Can I just name my young children?
Naming a minor directly usually creates problems, since a minor can’t legally manage a large account. A custodial arrangement or an appropriate trust is typically the better route — a conversation for your estate attorney.
What’s the SECURE Act 10-year rule?
Most non-spouse heirs who inherit a retirement account must withdraw all of it within 10 years, and in many cases take annual distributions along the way. Certain eligible beneficiaries can still stretch withdrawals over their lifetime. It significantly affects the tax outcome for whoever you name.
How often should I review my designations?
At minimum after any major life event — marriage, divorce, birth, death, or job change — and ideally as a routine check every few years alongside the rest of your plan.
This article is for educational purposes only and is not tax or legal advice. Consult your estate attorney and CPA before acting on anything described here.
Brent Rupnow is a Registered Representative with, and Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Via Luce Capital is not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Via Luce Capital, and may also be employees of Via Luce Capital. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of Via Luce Capital.