Beneficiary designation
A named recipient for a specific account — life insurance, 401(k), IRA, payable-on-death bank accounts. Overrides the will. Passes outside probate.
Beneficiary designations are set with the financial institution on a separate form, not in the will. They are legally controlling: a will that says 'leave my IRA to my son' is overridden by the IRA's beneficiary form that names a previous spouse from 20 years ago.
This is the single most common estate-planning failure. People update their will and forget to update beneficiary designations on retirement accounts and life insurance, sometimes resulting in major assets going to an ex-spouse or to a deceased family member.
After a death, beneficiaries on these accounts claim them directly with the institution, with the death certificate and a claim form. The money usually arrives in 2–6 weeks. The funds do not pass through probate and are not subject to the will's distribution.
Common failure mode: a beneficiary form names a person who has predeceased the account holder, and there is no contingent beneficiary. In that case the account falls back to the estate, joins probate, and may be subject to creditor claims it would have escaped.
- Payable on death (POD) / Transfer on death (TOD)— A simple way to pass a bank account, brokerage account, or vehicle title to a named person at death without going through probate. Set with the institution on a form.
- Intestate— Dying without a valid will. State law (the 'intestate succession statute') determines who inherits what — usually spouse and children first, then parents, siblings, and outward.
- Probate— The court-supervised process of validating a will (if there is one), paying debts, and transferring the deceased's property to heirs. Required in most cases, though some assets bypass it.
This definition is general consumer information, not legal, medical, or financial advice. Industry practices and regulations change occasionally; verify before relying on anything here for a specific decision.
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