The Steward's Desk · Estate planning
Some of the costliest estate mistakes never touch the will. They live in forms signed years ago and forgotten.
Jesse Plunkett, CEPA®, CRPC®
July 12, 2026 · Meet your advisor · 
Yes. Accounts with a named beneficiary pass directly to that person by contract, outside your will and outside probate. The form on file with the custodian or insurer decides who inherits, even if your will says something different, and even if the form is twenty years old.
Designations exist because they're useful: money moves fast, privately, and without a court. The trouble starts when the forms and the will stop agreeing. A will gets rewritten after a remarriage while a 401(k) from an old job still names a former spouse, or a parent from a first job out of college. The custodian doesn't read your will; it pays the form.
Mismatched beneficiary forms sit at the top of my list of financial blind spots for high earners, and they earned that spot for a simple reason: nothing looks wrong while you're alive.
Five account types to check: retirement accounts like 401(k)s and IRAs, life insurance policies, bank and brokerage accounts with transfer-on-death or payable-on-death registrations, annuities, and health savings accounts. Each pays whoever its form names, regardless of the will. Together, they often hold the bulk of a household's wealth.
| Account type | What decides who inherits | The common miss |
|---|---|---|
| Retirement accounts (401(k), IRA) | The beneficiary form on file with the plan or custodian. | An old employer plan still naming a former spouse or a parent, decades after the fact. |
| Life insurance | The beneficiary named in the policy. | No contingent beneficiary, so the payout can default to the estate and land in probate. |
| TOD / POD accounts | The transfer-on-death or payable-on-death registration at the bank or brokerage. | A registration added years ago that no longer matches what the will divides up. |
| Annuities | The beneficiary in the annuity contract. | A form from the original purchase, never revisited after a marriage, divorce, or death. |
| HSAs | The beneficiary form with the HSA custodian. | Never naming anyone at all. Many HSAs were opened in a hurry during benefits enrollment. |
The usual failures: an ex-spouse still named after a divorce, a deceased primary beneficiary with no contingent behind them, an estate named by default, or a minor child named directly. Each one is a form problem, fixable in minutes today and far harder to untangle after a death.
The divorce case deserves its own caution. Some states automatically revoke an ex-spouse's designation on certain accounts, but that protection is uneven, and employer retirement plans generally operate under federal law that pays whoever the form names. Counting on a statute to fix an outdated form is a gamble; updating the form is not.
The Supreme Court settled this in 2001, and the facts are worth knowing. In Egelhoff v. Egelhoff, 532 U.S. 141, David Egelhoff divorced in April 1994 and died about two months later, having never changed the beneficiary on his employer's life insurance and pension plans. Washington State had a statute that automatically revoked an ex-spouse's designation on divorce, and his children argued it applied. The Court held that ERISA preempted the state law, so the plan paid the form, and the form still named his ex-wife. Two months of paperwork, decided by the highest court in the country. The lesson is not that the law is cruel; it's that the form is the instruction, and nothing else gets a vote.
The other two cases are less visible versions of the same problem. Naming your estate, or letting it become the default, sends assets through probate and, for retirement accounts, can compress the tax timeline your heirs face. And naming a minor child directly usually forces a court to appoint someone to hold the money until adulthood. An estate attorney can solve both cleanly, often with a trust designed for the purpose.
On a calendar and on a trigger. Put a standing check every two or three years alongside a review of your broader estate plan. Then re-check immediately after a marriage, divorce, birth, or death in the family, a new job, or any account rollover. Rollovers reset beneficiary forms more often than anyone expects.
That last one surprises clients: a new IRA doesn't inherit the beneficiaries from the 401(k) it came from. The new form starts blank, and blank means the custodian's default rules apply.
The fix is unglamorous and effective. Keep a one-page list of every account that carries a designation and who is named on it, primary and contingent. I build and maintain that list for clients as part of estate coordination, and we check it against the will and trust whenever the attorney updates them, so the documents and the forms tell the same story. For what the will itself does and doesn't control, the companion piece on will versus trust picks up from here.
Pulling them together and checking them against your wishes is a normal first project to do together. A short call is the place to start.
No, the 401(k) form wins. Employer retirement plans pay the beneficiary named on the plan's form, generally under federal law, regardless of what your will says. One nuance: if you're married, many plans require your spouse's written consent before anyone else can be named as primary beneficiary.
The account's default rules take over, and for many account types the default is your estate. That routes the money through probate, adds delay, and for retirement accounts can worsen the tax timeline your heirs face. Naming a primary and a contingent beneficiary takes minutes and avoids all of it.
Usually not, especially for retirement accounts. Naming the estate sends assets through probate and can compress the distribution timeline for heirs, which often means more tax, sooner. There are cases where an attorney deliberately routes assets through a trust instead; that's a strategy designed on purpose, not a default to fall into.
Possibly. Some states automatically revoke an ex-spouse's designation on certain account types, but those laws are uneven, and employer retirement plans generally follow the form on file. The safe assumption is that whoever is named gets paid. Once a divorce is final, updating every beneficiary form belongs on the short list.