You set up your 401(k) beneficiaries 15 years ago when you first started the job. You were dating someone at the time, so you listed them as your beneficiary. Then you broke up, got married, had kids, and never updated anything. If you died tomorrow, your ex-girlfriend would inherit your entire 401(k) while your spouse and kids got nothing.
This happens all the time. People set beneficiaries once and never look at them again. Then life changes—marriage, divorce, kids, death of a loved one—and nobody updates the paperwork. Beneficiary designations control who gets your retirement accounts, life insurance, and some bank accounts when you die, and they override your will. That means even if your will says everything goes to your spouse, if your ex is still listed as the beneficiary on your IRA, your ex gets the money.
We review all your beneficiary designations—retirement accounts, IRAs, life insurance policies, transfer-on-death accounts—and make sure they’re correct, up to date, and coordinated with your overall estate plan.
Most people don’t understand this: beneficiary designations are more powerful than your will. Your will controls assets that go through probate (like your house or your car). Beneficiary designations control assets that bypass probate (like retirement accounts and life insurance).
If your will says “everything to my spouse” but your 401(k) beneficiary is your mom, your mom gets the 401(k)—not your spouse. If your life insurance beneficiary is your ex-spouse from 20 years ago, your ex gets the death benefit—even if you’ve been remarried for 15 years.
This is why beneficiary reviews are so important. Most people spend thousands on estate planning attorneys but never fix their beneficiaries, rendering the entire estate plan useless.
Mistake #1: Outdated beneficiaries. You listed your parents 20 years ago when you were single. Now you’re married with kids, but you never updated it. Your parents would inherit everything, leaving your spouse and kids with nothing.
Mistake #2: Naming minors directly. If you name your 8-year-old as beneficiary and you die, the court appoints a guardian to manage the money until they turn 18—then they get it all at once. Most 18-year-olds aren’t ready to handle a $500,000 inheritance. Better to name a trust as beneficiary so the money is managed properly.
Mistake #3: No contingent beneficiaries. You name your spouse as primary beneficiary but don’t name a contingent. If you both die in an accident, the account goes through probate and gets distributed according to state law—which might not be what you wanted.
Mistake #4: Not coordinating with your trust. You paid an attorney to create a trust, but your retirement accounts still name individuals as beneficiaries. That might be correct (retirement accounts usually shouldn’t go to trusts directly), but it needs to be intentional, not accidental.
Arizona is a community property state, which means assets acquired during marriage generally belong 50/50 to both spouses. This affects beneficiary designations—if you try to name someone other than your spouse as beneficiary on a retirement account, your spouse might need to consent in writing. Otherwise, they could challenge the designation after your death.
Most people don’t know this rule exists, which can create legal problems if the beneficiary designation doesn’t align with Arizona community property law.
We review all your beneficiary designations—401(k), IRA, Roth IRA, life insurance, annuities, transfer-on-death accounts—and compare them to your current life situation and estate plan. We identify outdated beneficiaries, missing contingent beneficiaries, and conflicts with your estate documents.
We also coordinate with your estate attorney to make sure beneficiary designations align with your trust and overall estate plan. We don’t change beneficiaries without your approval—we just show you what’s wrong and help you fix it.
Beneficiary designations are one of the easiest and most important parts of estate planning that almost everyone gets wrong. Reviewing and updating beneficiaries takes 30 minutes and could save your family from legal nightmares and unintended consequences after you’re gone.
When’s the last time you reviewed your beneficiaries? Let’s make sure they’re correct before it’s too late.
