When most people think about estate planning, they think about their will or trust. But there’s one small detail that can completely override those documents — your beneficiary designations.
As you tackle your spring cleaning this March, it’s the perfect time to review an often-overlooked part of your estate plan.
What Is a Beneficiary Designation?
A beneficiary designation is the form you complete to name who will receive certain assets when you pass away. These designations control:
- Retirement accounts (IRAs, 401(k)s, 403(b)s)
- Life insurance policies
- Payable-on-death (POD) bank accounts
- Transfer-on-death (TOD) investment accounts
- Some annuities
Here’s the important part: Beneficiary designations typically override your will or trust.
That means even if your will says one thing, the beneficiary form you signed years ago could say something very different — and that form will usually control.
Why This Matters
We regularly see situations where:
- An ex-spouse is still listed as the beneficiary.
- A deceased loved one was named and no contingent beneficiary was chosen.
- Minor children were listed directly, creating the need for court involvement.
- Assets unintentionally bypass a carefully crafted trust plan.
Often, these issues aren’t caused by bad planning — they’re caused by forgetting to update forms after life changes.
When Should You Review Your Beneficiaries?
Spring is a great annual reminder, but you should especially review your designations after:
- Marriage or divorce
- The birth or adoption of a child or grandchild
- The death of a named beneficiary
- Significant changes in your financial situation
- Creating or updating a trust
If you’ve established a revocable trust as part of your estate plan, certain accounts may need to coordinate with that trust to ensure everything works as intended.
Common Mistakes to Avoid
- Naming minor children directly.
If a minor inherits assets outright, a court-appointed conservatorship may be required until they reach adulthood. - Forgetting contingent beneficiaries.
Always name a backup beneficiary in case your primary beneficiary predeceases you. - Assuming your will “covers everything.”
It doesn’t override beneficiary forms. - Never reviewing old paperwork.
Forms completed 10, 15, or 20 years ago may not reflect your current wishes.
A Simple Spring Action Step
Take 30 minutes this month to:
- Request copies of your current beneficiary designations from financial institutions.
- Confirm primary and contingent beneficiaries.
- Ensure they align with your overall estate plan.
- Contact your estate planning attorney if you’re unsure how accounts should be structured.
Estate planning works best when all the pieces coordinate. Your will, trust, powers of attorney, and beneficiary designations should function together — not compete with one another.
Spring cleaning isn’t just about clearing out closets. It’s about making sure what matters most is organized, up to date, and aligned with your wishes.
If it’s been a while since you’ve reviewed your estate plan, we’re happy to help you make sure everything is working the way it should.
Contact us Legacy Counsellors North today at (603) 643-7577 or email office@estateandelderlawgroup.com.
