Are Your Beneficiaries Up-to-Date? (Why it Matters More Than You Think)

When was the last time you checked the beneficiaries on your retirement accounts, life insurance, or annuities? If you’re like many people, it might have been years ago when you first filled out the forms. Having up-to-date beneficiary designations is more important than you think – and forgetting to review them can undermine even the best-laid estate plans.

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What’s a Beneficiary?

It’s the person (or trust, or charity) you name to receive an asset upon your death. Common accounts that have beneficiary designations include life insurance policies, 401(k)s and IRAs, pensions, and bank accounts with “payable on death” (POD) designations. These beneficiary instructions are powerful: they override your will. That’s right – even if your will says “I leave my IRA to my daughter,” if the IRA’s beneficiary form still lists your ex-spouse, the ex-spouse is getting that money.

Why It Matters to Keep Them Updated:

  • Avoiding Unintended Heirs: Life happens; marriages, divorces, new children or grandchildren, deaths in the family. If you don’t update your beneficiaries after these events, your assets might go to someone you no longer intend. There are heartbreaking cases of ex-spouses or estranged relatives receiving life insurance proceeds or retirement funds simply because the form was never changed. Don’t let your legacy accidentally end up in the wrong hands.
  • Preventing Legal Fights: Outdated beneficiaries can lead to messy disputes. For example, if your will and your account forms contradict each other, family members could end up in court. Since beneficiary forms usually win out, someone feeling left out might challenge the estate or cause conflict among your loved ones. Clear, current designations help ensure everyone understands your wishes.
  • Speeding Up Payouts (and Avoiding Probate): One big advantage of naming beneficiaries is that those assets typically bypass probate and get paid directly to the named parties. This only works if the names are correct! An updated beneficiary means your heirs get the funds faster, with less hassle. If you never named anyone or your beneficiary passed away and you didn’t update, that account might revert to your estate and go through probate, slowing everything down.

When and How to Update:

You should review and update your beneficiary choices whenever a major life event happens, and at least every few years regardless. Here are key triggers for an update:

  • Marriage or Divorce: If you’ve recently married, consider adding your spouse (or maybe you prefer to keep an account separate – but decide intentionally). After a divorce, it’s crucial to remove a former spouse if you no longer want them to inherit.
  • Death of a Beneficiary: If a primary beneficiary predeceases you, and you haven’t named a contingent (secondary) beneficiary, that asset will likely go to your estate by default. Always list at least one contingent beneficiary in case the primary can’t receive the asset.
  • Birth or Adoption of a Child/Grandchild: Ensure new additions to the family are included as you wish. You might name a child directly or set up a trust for minor children and name the trust as beneficiary (since minors can’t legally receive large sums outright).
  • Changes in Your Intentions: Maybe a falling-out or a reconciliation in the family changes whom you want to benefit, or perhaps a beneficiary has become financially independent and you’d rather direct assets elsewhere. Any time your heart or mind changes on “who gets what,” update the form.


Updating is usually straightforward. Contact the account provider (your bank, insurance company, employer plan administrator, etc.) and request a beneficiary change form. Many institutions even allow updates online. You’ll typically need the beneficiary’s full name, relationship, and possibly their birth date and Social Security number (to ensure precise identification).


Double-Check the Details: Small errors can cause big problems. Make sure names are spelled correctly. If a beneficiary changed their name (due to marriage, for example), update that. Ensure you understand the rules – for instance, “per stirpes” vs. “per capita” distributions (fancy terms that decide if a beneficiary’s share goes to their children if they predecease you). If you want a beneficiary’s portion to automatically go to their kids if that beneficiary dies before you, you might write their name followed by “per stirpes.” If not, you may need to name contingent beneficiaries for that scenario. Don’t worry – we can guide you through this.

The Hidden Pitfall of Not Naming Anyone

If you leave a beneficiary section blank or all your named beneficiaries have predeceased you, most account agreements will then pay the asset to your estate. That means it will go through probate and be distributed per your will (or state law if no will). This could also mean unnecessary taxes or creditors having a chance at it. It defeats the purpose of the beneficiary feature. So ensure someone is named at all times.

In summary, keeping your beneficiary designations up-to-date is a quick task that can save your loved ones from confusion, conflict, and delays down the road. It’s one of those little details that has a big impact.

Need help reviewing your beneficiary designations as part of your overall plan? Schedule an in-depth consultation with Legasure. We’ll walk through each of your accounts and policies to make sure the right people are in line to inherit – and that no surprises derail your legacy. Schedule your consultation here.