Family & Protection
What Your Will Doesn't Control
A will is essential. But it does not govern most of the assets in a typical financial plan.
The limits of a will
A will is a legal document that directs how your probate estate is distributed after your death. It is an important piece of an estate plan. But the assets that pass through a will are often a minority of what a person actually owns. Retirement accounts, life insurance policies, jointly held property, and accounts with payable-on-death designations all pass outside the will — directly to the named beneficiary or surviving owner, regardless of what the will says.
Beneficiary designations: the parallel system
Retirement accounts — 401(k)s, IRAs, 403(b)s — and life insurance policies pass by beneficiary designation, not by will. The designation form you filed with your employer or insurance company controls the distribution. If that form names someone who is no longer the intended recipient, the will cannot override it. Courts have consistently enforced beneficiary designations even when they conflict with a will, a divorce decree, or the obvious intent of the deceased.
Account titling: joint ownership and survivorship
How an account is titled determines what happens to it at death. Accounts held as joint tenants with right of survivorship pass automatically to the surviving owner — outside the will, outside probate. Community property in California has its own rules. Accounts held in a trust pass according to the trust document. Understanding how each of your accounts is titled is a prerequisite for understanding how your estate will actually be distributed.
The coordination problem
The most common estate planning mistake is not having a bad will — it is having a will that says one thing while beneficiary designations and account titling say something else. A person might update their will after a divorce but forget to update the beneficiary on their 401(k). Or they might intend to leave assets equally to their children but have one child named as the sole beneficiary on a large account. The will and the non-probate assets need to be coordinated, not just individually correct.
What a financial plan should address
A financial plan that takes estate planning seriously reviews both the will and the non-probate assets together. It asks: where does each account go at death? Is that consistent with the overall intent? Are there gaps — accounts with no beneficiary named, or outdated designations that no longer reflect current relationships? These are not questions for a financial planner alone — they require an estate planning attorney. But a financial planner can help identify where the gaps are.
Your will matters. But it is only one piece of how your assets will actually be distributed. The rest of the picture is worth reviewing.
If you have not reviewed how your accounts are titled and who your beneficiaries are, that is worth putting on the list.
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