Your will distributes your house, your car, and your jewelry. It does not distribute your 401k, your IRA, your life insurance, your HSA, or any TOD account. Those pass by beneficiary designation, period. When the two conflict, the designation always wins.
Your will is a powerful document, but its power has limits. It controls assets that pass through probate: your house (if not held in a trust or joint tenancy), your car, your bank accounts without a payable-on-death designation, your personal property, anything titled solely in your name without a beneficiary attached. Everything else passes outside the will, by operation of contract or operation of law.
The "by contract" category is enormous and growing. Your 401(k), your IRA, your Roth IRA, your pension, your life insurance, your annuities, your HSA, your transfer-on-death (TOD) brokerage account, your payable-on-death (POD) bank account, in many states even your TOD vehicle title and TOD real estate deed: every one of these passes by beneficiary designation. The form you filled out when you opened the account is the controlling document. Your will does not touch it.
This is the surprise that cleans out estates every year. Someone writes a careful will leaving "everything to my current spouse and children equally," and then the 401(k) goes to the ex-spouse named on a form filled out 22 years ago. The will lawyer never saw the form. The plan administrator never saw the will. The contract wins.
About half the states have automatic-revocation-by-divorce statutes. The idea: when you finalize a divorce, any beneficiary designation that names your ex-spouse is automatically void as a matter of state law, so you do not have to remember to update every form. Sensible policy, well-meaning legislatures.
The problem: those statutes do not apply to most retirement accounts, because of a 2001 Supreme Court case called Egelhoff v Egelhoff. David Egelhoff named his wife Donna as the beneficiary of his ERISA-governed pension and life insurance. They divorced. He died two months later without updating the forms. Washington's automatic-revocation-by-divorce statute said Donna's designation was void. His children from a prior marriage sued.
The Supreme Court ruled 7-2 that ERISA preempts state law on this point. The Employee Retirement Income Security Act, the federal law that governs most employer-sponsored retirement plans, requires plan administrators to follow the documents on file. State statutes that would override those documents are preempted. Donna got the money. The children got nothing.
If you divorced your ex 10 years ago and never updated your 401(k) beneficiary form, your ex still gets your 401(k). State automatic-revocation laws do not apply. Your will does not apply. The form on file is the only thing that matters.
ERISA preemption applies to employer-sponsored retirement plans: 401(k), 403(b), 457(b), pension plans, ERISA-governed life insurance through your employer. It also applies to most large group life policies offered through work.
It does not apply (or applies inconsistently) to:
The patchwork is the problem. There is no single rule. The only safe approach is to assume that the form on file controls, regardless of what your will says or what state law says, and to update every form individually whenever your circumstances change.
Every beneficiary designation form has at least three layers worth filling out:
The person or persons who receive the asset if they survive you. Most accounts let you name multiple primary beneficiaries with percentage shares (50/50, 25/25/25/25, etc). If you name three primary beneficiaries at one third each and one of them predeceases you, the default rule on most plans is that their share is divided among the surviving primaries. Your three kids becomes two kids, and the predeceased child's family gets nothing.
The fallback if every primary beneficiary predeceases you. Most people leave this blank. That is a mistake. If your only primary is your spouse and you both die in the same accident, an empty contingent line means the asset goes to your estate, gets dragged through probate, and ends up distributed under your will (or under intestate succession if you do not have one). Naming your kids as contingent beneficiaries skips probate entirely in that scenario.
If your custodian offers it (not all do), check the per stirpes box. This means if a primary beneficiary predeceases you, their share goes to their descendants (your grandchildren) instead of being redistributed to the surviving primaries. For families with kids and grandkids, this is almost always the right default. We cover the mechanics in detail in our piece on per stirpes vs per capita.
Custodian-by-custodian variation: Vanguard offers per stirpes on IRAs. Fidelity offers it on most accounts. Schwab offers it on most accounts. Many smaller brokerages and most 401(k) plan administrators do not. If yours does not, you can usually upload a custom designation form that achieves the same result, but you have to ask.
Once a year, ideally tied to a date you already remember (your birthday, the start of open enrollment, tax day), pull every account that has a beneficiary designation and verify it matches your current intent. Here is the list:
For each one, check three things: who is the primary, who is the contingent, and is per stirpes elected where available. Print the confirmation pages or save them to a single folder. If anything looks wrong, log into the account and update it. Most updates are a 90-second web form. None of them require a lawyer.
Every time you update your will, also pull every beneficiary form. Every time you have a major life event (marriage, divorce, birth, death of a beneficiary), also pull every beneficiary form. The will and the forms have to agree, and the only way to make sure they do is to look at both at the same time.
Five patterns that show up in probate court more than any others:
None of this means your will is unimportant. Your will distributes everything that is not covered by a beneficiary designation: the house if it is solely titled, the car, the personal property, the bank accounts without a POD, the brokerage accounts without a TOD, anything you forgot to designate. It also names your executor, sets your guardianship preferences, and handles taxes and debts.
The will and the designations are two parallel systems that have to be coordinated. Either one alone is incomplete. Both together, properly aligned, is the actual estate plan. If you want to think through whether a trust would let you simplify some of this, our walkthrough of the trust vs will tradeoff covers the relevant ground.
DocSats keeps your will, beneficiary inventory, and account list encrypted on your own device (we cannot read any of it, by design), with a Bitcoin-blockchain anchor proving when each version was created. The annual beneficiary review fits naturally into the same dashboard you use for the will itself, so the two stay aligned without you having to remember which custodian had which form. The whole point is that the coordination problem stops being something you have to track in your head, on a sticky note, or in a spreadsheet your family will never find.
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