Who Will Inherit Your Assets? Why Beneficiary Reviews Matter
If something happened to you, would you know exactly who would inherit your assets? Many people assume their will or trust determines who receives everything they own. While these documents are an important part of an estate plan, they may not control every asset. Beneficiary designations on certain accounts can take precedence over the instructions in your will or trust.
For example, retirement accounts, life insurance policies, annuities, and other financial accounts allow you to name beneficiaries directly on the account. When a beneficiary is properly designated, that beneficiary generally receives the account according to the terms of the beneficiary designation, rather than according to the instructions in your will.
This means you could have a carefully prepared estate plan, but if the beneficiary designation on an account is outdated, your assets may not end up where you intended.
Why Beneficiary Reviews Matter
Beneficiary designations can seem like a small detail, but they can have a significant impact on an estate plan.
We’ve seen situations where an ex-spouse remains listed as the beneficiary of a retirement account. If that beneficiary designation has not been properly updated, the account may pass to the former spouse rather than the individual’s current spouse or other intended heir, depending on the circumstances and applicable law.
That’s why beneficiary planning shouldn’t be a “set it and forget it” task.
As part of an ongoing estate planning review, it’s important to take inventory of your accounts, identify which ones have beneficiary designations, and confirm that the people or entities listed still reflect your wishes.
So, What Is a Beneficiary?
A beneficiary is a person, trust, organization, or other eligible entity designated to receive an asset or account upon the owner’s death.
You may be able to name multiple beneficiaries and specify how the assets should be divided among them. Many accounts also allow you to name both primary beneficiaries and contingent beneficiaries.
- Primary beneficiary: The person or entity designated to receive the asset first.
- Contingent beneficiary: The person or entity designated to receive the asset if the primary beneficiary is unable or otherwise not entitled to inherit it.
Having both primary and contingent beneficiaries in place can help ensure there is a clear plan for the account.
Life Changes Should Trigger a Beneficiary Review
One of the easiest ways for beneficiary designations to become outdated is simply through life changes.
Every major life event can be an opportunity to revisit your estate plan and confirm that your beneficiary designations still align with your wishes.
Consider reviewing your beneficiaries after:
- Marriage
- Divorce
- Birth or adoption of a child
- Death of a beneficiary
- Major financial changes
- Changes to your family circumstances
- Creating or updating a will or trust
- Changes in your retirement or insurance accounts
It’s also a good idea to review your beneficiaries periodically, even if nothing major has changed. You may discover that an account still has an outdated designation that you simply forgot about.
Your Beneficiary Review Checklist
When reviewing your estate plan, consider working through the following checklist:
- Identify every account that has a beneficiary designation
- Verify your current primary and contingent beneficiaries
- Review beneficiary percentages to make sure they add up to 100% and reflect your wishes
- Review per stirpes vs. per capita designations and understand how assets would pass if a beneficiary predeceases you
- Look for former spouses or deceased beneficiaries who may still be listed
- Coordinate beneficiary designations with your will or trust so your overall estate plan works together
- Review retirement account beneficiaries and consider the potential tax and distribution implications
- Review life insurance and annuity beneficiaries
- Consider tax implications associated with who inherits different types of assets
- Keep documentation of your beneficiary designations and make sure your financial planning and estate planning professionals have the information they need
Your Estate Plan Is More Than Your Will
Estate planning isn’t simply about creating a will or trust and putting it in a drawer. It’s an ongoing process that should evolve as your life changes.
That’s why beneficiary designations are part of your Living Financial Plan™. Reviewing who is listed on your accounts helps ensure those decisions still reflect your wishes and fit with the rest of your plan.
When was the last time you reviewed your beneficiaries? If you can’t remember, it may be time to take a closer look.
Written by: Shannon Stophel, CFP®
Published on: September 28, 2026