A will is the document people think of as the final word. It gets drafted, signed, witnessed, and filed somewhere safe. Then a retirement account, a life insurance policy, and a bank account pay out to someone the will never mentions, because none of those three ever read it.
Most of the money in a typical household moves by contract rather than by will. The contract is a short form, often filled in at a desk during a first week on a job, and almost never opened again.
Which accounts pass outside the will
A will governs probate assets: the house, the car, the furniture, whatever sits in your name with no instruction attached. Several of the largest things a household owns carry their own instruction and skip probate entirely.
The usual list is employer retirement plans, individual retirement accounts, life insurance, annuities, pensions, payable-on-death bank accounts, and transfer-on-death brokerage registrations. Each one pays the name recorded with the custodian. A clean designation means the money reaches a person in weeks rather than after a probate calendar. A stale one means the money reaches the wrong person just as quickly.
Start by listing the accounts and finding where each designation actually lives. Retirement plans keep it in the plan portal. Insurers keep it in the policy file. Banks keep it on the signature card or an online beneficiary tab that is easy to miss.
A divorce decree that did not move the money
The Supreme Court settled the sharpest version of this in Kennedy v. Plan Administrator for DuPont Savings and Investment Plan, decided unanimously on January 26, 2009.
William Kennedy named his wife Liv as the beneficiary of his DuPont savings plan. They later divorced, and the divorce decree stripped her of any interest in the plan. He never filed a new form. When he died, his estate asked for the balance and the plan administrator paid his ex-wife instead. The Court held that the administrator had done exactly what federal law requires, which is to pay according to the documents governing the plan.
Read the practical lesson rather than the legal one. A decree binds the person who signed it and can support a claim against them later. It does not reach into a plan record and change a name. Only a new form does that.
A state revocation law that lost to federal preemption
Many states have statutes that automatically cancel an ex-spouse's designation when a divorce becomes final. Those laws are real, and for plan-governed benefits one of them has already been struck down.
In Egelhoff v. Egelhoff, decided March 21, 2001, the Court ruled that a Washington statute revoking a spousal beneficiary designation on divorce was preempted by federal retirement law, because it forced a plan administrator to ignore the plan documents. State revocation rules can still operate on assets outside that federal frame, which leaves a household guessing about which rule applies to which account.
The safe assumption is that nothing revokes itself. Treat every designation as permanent until you have a dated confirmation that you changed it.
The signature some employer plans require from a spouse
Rules tracing back to the Retirement Equity Act of 1984 give a married participant's spouse a claim on many employer plans by default. Naming anyone else, a sibling or an adult child from a first marriage, typically requires the spouse's written consent, acknowledged in front of a notary or a plan representative.
Individual retirement accounts carry no equivalent federal requirement, and community property states add their own layer. So the same family can hold two accounts where the identical form produces opposite results. Ask the plan administrator in writing which rule governs the account before assuming the form you submitted will hold.
The blank line under contingent
Every form has two tiers. The primary beneficiary collects. The contingent beneficiary collects only if no primary survives. The second line is the one people leave empty.
When the only primary has died and no contingent is named, most accounts fall back to a default order written into the plan or policy, and that default frequently ends at the estate. An inherited retirement account that lands in an estate loses payout options that a named person would have had, and it gains a probate file.
Two more details decide real cases. Percentages have to total one hundred, and a form that totals ninety-five invites a dispute. And when a beneficiary dies before you, the phrase per stirpes directs that person's share to their own children, while the default usually redistributes it among the surviving beneficiaries. Not every custodian accepts per stirpes language, so confirm it rather than writing it in the margin.
Naming a minor, a trust, or the estate itself
Three choices cause most of the expensive surprises.
- A minor named directly. Insurers and custodians will not hand a large sum to a child, so a court appoints someone to hold it, which costs money and takes months.
- The estate named as beneficiary. This converts an asset that would have passed privately into one that passes through probate, exposed to creditors and to public filing.
- A trust named without matching drafting. A trust can be the right answer, and it only works when the trust document was written to receive that specific kind of account.
All three are worth a conversation with an attorney rather than an afternoon with a form. The point here is only to recognize which choices trigger that conversation.
A twenty-minute review, once a year
- List every account that has a beneficiary line, including old employer plans you never rolled over.
- Pull the current designation from each custodian rather than trusting your memory, and save the confirmation or a screenshot with the date.
- Check spelling, dates of birth, and identifying numbers, since a claim stalls on a misspelled surname.
- Confirm percentages total one hundred and that the contingent line is filled in.
- Redo the review after a marriage, a divorce, a birth, a death, or a job change, because those five events cause nearly every mismatch.
- Tell the people you named which company holds what, so a claim can start without a search.
When a form does go missing, two public tools help. The Department of Labor's Retirement Savings Lost and Found, created by section 303 of the SECURE 2.0 Act and due to open by December 29, 2024, lets a worker or survivor look up plan administrators who may owe them benefits, though employer participation is voluntary and an empty result proves nothing. For policies, the free NAIC life insurance policy locator asks participating insurers to search their records for a deceased person and contact the beneficiary directly.
Both are cleanup. The cheaper version is a dated confirmation in a folder next to your will, and the reasoning behind that habit sits in the Court's own words in the Kennedy opinion. The document that governs is the one the plan holds, not the one you meant to send.