Having a will in place is a meaningful step, but it does not always determine who receives your assets. In some instances, your beneficiary designations carry more weight than your will. Retirement accounts, life insurance and payable-on-death (POD) accounts go directly to the person named, bypassing your will and probate entirely.
That said, it is not always straightforward. If a named beneficiary passes away before you do, or if a surviving spouse claims their statutory share under Kentucky law, the outcome may differ from what you intended.
What you need to name
Most accounts let you name two types of beneficiaries:
- Primary beneficiaries: These individuals (or trusts) receive the asset first.
- Contingent beneficiaries: These are your “backup” in case your primary beneficiary passes away before you do.
If you do not name a contingent beneficiary, the asset may pass according to the account’s default terms, which in some cases could include your estate and require probate. Even with simpler procedures, probate can still take time and cost money.
How to update your designations
To update your beneficiaries, contact each financial institution and request a change form. Submit it with both primary and contingent beneficiaries listed. Keep a copy, confirm the change, and update each account separately.
When to review your designations
It is standard practice to review your designations after major life events:
- Marriage, divorce or remarriage
- Birth or adoption of a child
- Death of a beneficiary
- A beneficiary becoming disabled or using government benefits
- Moving to a new state, including Kentucky
Even without major life changes, a periodic review every three to five years can help ensure your designations still reflect your intentions.
What Kentucky law does and does not do automatically
Kentucky law provides some protection after divorce, but that protection has limits. A divorce or annulment automatically revokes provisions made to a former spouse in a will. For non-probate assets, however, the rules are different:
- Life insurance policies and IRAs are not automatically updated after divorce. An ex-spouse could still inherit if the designation is never changed.
- Employer-sponsored retirement plans such as 401(k)s are governed by federal law (ERISA). Plan administrators must pay whoever is named on file, regardless of a subsequent divorce.
Updating these designations directly and promptly is the only reliable way to ensure your wishes are carried out.
How conflicting documents can affect your estate
When beneficiary forms, wills and trusts conflict, the beneficiary designation typically controls, regardless of what your will says. Because the rules vary depending on the type of account and governing law, inconsistencies across documents can produce outcomes no one intended.
An estate planning professional can help identify and resolve those gaps before they become a problem. Given how much can turn on a single outdated form, that review is worth doing sooner rather than later.