You may have worked with an attorney, signed a will, and clearly stated that your children should receive your estate equally. But what happens if your retirement account still names one child as the beneficiary? Or what if your life insurance policy names a former spouse to receive insurance proceeds? Does a beneficiary designation override a will? In many situations, yes.
Certain assets pass according to a beneficiary designation or other non-probate transfer rather than the terms of your will. That means a well-drafted will cannot necessarily fix an outdated beneficiary form. That also means that you have options for giving assets to your loved ones while bypassing probate. The estate planning actions you should take depend on your specific goals and needs.
At the Law Office of Andrew M. Lamkin, P.C., we focus on the estate planning needs of New York residents. We bring award-winning, practical counsel to our clients so they can best protect their loved ones.
How Do Wills Work?
A will tells your executor how you want property in your probate estate distributed after your death. In general, your will must be filed with the Surrogate’s Court and admitted to probate.
Probate establishes that a will is legally valid, and once the court accepts the will, the executor can:
- Inventory and appraise the assets in your probate estate,
- Pay estate debts and taxes, and
- Distribute the probate estate’s assets.
The important phrase here is “probate estate.”
Depending on the arrangements you make, not every asset you own becomes part of your probate estate after you pass. Some property, such as property subject to a beneficiary designation, has its own mechanism to determine who receives your property after your death. That property may pass outside probate.
Does a Beneficiary Designation Override a Will?
In general, yes. Now, let’s talk about why.
A will can only dictate what happens to property your probate estate owns after your passing. If you designate someone as a beneficiary on a policy, account, or title, that property typically transfers to the beneficiary the moment you pass, and it never becomes part of your probate estate. Because property that transfers to a designated beneficiary is not part of the probate estate, a will cannot distribute it.
This distinction between probate and non-probate property explains much of the confusion surrounding beneficiary vs. will disputes. The beneficiary designation puts the property in a category that a will does not cover.
When Do Beneficiary Designations Override a Will?
There are many types of legal arrangements for transferring property to beneficiaries outside of probate. Below, we discuss common ways to designate a beneficiary.
A Trust Beneficiary vs. a Will Beneficiary
A trust is a popular way to control your property during your lifetime and after your passing. Some individuals create testamentary trusts in their wills, but you can also transfer your property to a trust during your lifetime. Property you transfer during your lifetime becomes the property of the trust and is passed to beneficiaries after you die, bypassing probate.
Transfer-on-Death Deeds, Payable-on-Death, and Joint Accounts
Depending on how they are titled, bank accounts and real estate can also pass outside the probate process through:
- Transfer-on-death deeds. You can allow real estate to bypass a will and probate by designating beneficiaries on a transfer-on-death deed (TOD) and recording it with the county clerk.
- Payable-on-death accounts. This designation allows a bank account to pass to a named beneficiary without the need for probate.
- Joint accounts. If you are a joint owner of a bank account, the money in your account automatically transfers to a joint owner who survives you.
Joint accounts and property titles with survivorship rights may designate one or more beneficiaries to receive qualifying property at an owner’s death and apart from a will.
Designations on Retirement Accounts and Insurance Policies
Retirement and insurance benefits are among the most important assets to review. Beneficiary designations on these accounts normally are not subject to your will, and include:
- Retirement accounts. Retirement plan benefits are typically paid to the last beneficiaries designated. Major life events such as marriage, divorce, birth or adoption of a child, or death of a loved one may justify another review.
- Insurance policies. Life insurance policies likewise commonly involve beneficiary designations that bypass wills and probate. You want to review your policies and beneficiary records to determine what steps the insurer requires for a change.
You might have signed the paperwork with your employer and forgotten about it, but it may be time to pull those papers out and take a look at what might need updating.
Why Regularly Reviewing and Updating Designations Is Important
Forgetting to change an old beneficiary designation can cause turmoil in many ways. For example, suppose you divorce, remarry, and prepare a new will leaving your estate to your current spouse and children. If an account or policy still names your ex as a beneficiary, your ex may receive proceeds that you intended for your new spouse. Certain laws can affect designations after divorce, and different assets can follow different rules, so each designation should receive an individual review.
When Does a Will Override a Beneficiary Designation?
Typically, wills don’t override beneficiary designations unless you make a mistake in the legal documents. Along with reviewing your estate planning documents to see if you need to update them, you may need to review your documents to see if they are enforceable.
Who You Should Never Name as Beneficiary Without Careful Planning
There is no single person you should never name as a beneficiary in every situation. Estate plans are too individual for that rule. There are, however, designations that deserve special care, such as:
- Minors. When thinking about who you should never name as a beneficiary without careful planning, you may want to take extra care with minor children as beneficiaries. A beneficiary under 18 may see their payment go to their court-appointed guardian.
- Vulnerable parties. You should also think carefully before naming someone whose circumstances could make a direct inheritance problematic, such as a person who receives government benefits. A direct transfer of assets to someone who receives government benefits may affect the amount they receive.
The goal is not merely to put a name on every beneficiary form. It is to understand what might happen after your death.
Why Should You Review Your Designations Regularly?
An estate plan works best when you review it to make sure its individual parts tell the same story. Use this short checklist when reviewing your plan:
- Speak to a knowledgeable attorney about your goals,
- Review beneficiaries named in retirement accounts and insurance policies,
- Check financial accounts with survivor rights,
- Review transfer-on-death deeds,
- Review designations after major life events, and
- Make sure your beneficiary designations coordinate with your will and any trusts.
We focus on estate planning to help ensure your plan covers everything you need.
We Can Help
At the Law Office of Andrew M. Lamkin, our award-winning estate planning attorney can look beyond your will and review how your assets are actually titled and designated. We ask more than, does a beneficiary designation override a will? We ask whether your beneficiary designations, will, trusts, deeds, and account ownership all work together to carry out the plan you actually want. Please call or contact us online to schedule an appointment.
Legal References Used to Inform This Page
To ensure the accuracy and clarity of this page, we referenced official legal and other resources during the content development process:
- New York State Unified Court System, Probate – When a Person Dies with a Will.
- Joint deposits and shares; ownership and payment, N.Y. Banking Law § 675 (2014).
- Transfer on death deed, N.Y. Real Prop. Law § 424 (2024).
- Funding of lifetime trust, N.Y. Est. Powers & Trusts Law § 7-1.18 (2014).
- Payment of proceeds, N.Y. Ins. Law § 3213 (2014).
- New York State Office of the State Comptroller, Life Changes: Why Should I Designate a Beneficiary?
- New York State Bar Association, New York Now Allows Transfer on Death Deeds, but Should You Use Them? (Dec. 10, 2024).
Andrew Lamkin is principal in the law firm of Andrew M. Lamkin, P.C., where he focuses his practice in the areas of elder law, estate planning and special needs planning, including Wills and Trusts, Medicaid planning, estate administration and residential real estate transactions. He is admitted to practice law in New York and New Jersey.
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