Beneficiary Designations: 9 Questions for Retirement Planning
Blake Wealth Management
September 16, 2026
If something happened to you today, would your money go to the people you want, in the way you want?
A beneficiary designation review can help you answer that question. It means checking the forms tied to your IRAs, workplace retirement plans, life insurance, annuities, bank accounts, and brokerage accounts. These forms often control who receives the asset, even if your will says something different.
Your life may look very different from when you first opened an account. A spouse may have died. You may have divorced or remarried. Children and grandchildren may have joined the family. Your relationships, goals, and account values may have changed. Your beneficiary choices need to reflect your life today.
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Why Beneficiary Designations Deserve Their Own Review
Many people believe their will controls where all their money goes. That is usually not how accounts with a valid beneficiary designation work.
If your IRA still names a former spouse, changing your will may not fix the problem. The beneficiary form may still control. Divorce laws and account rules differ, so it is risky to assume that a divorce automatically removes an ex-spouse.
We once worked with a client who believed her two adult daughters were named on a life insurance policy she had owned for years. When we checked with the insurance company, her former husband was still listed. He had also passed away. The issue could be addressed while she was living, but it may have caused delays and extra work if no one had checked.
A good review goes beyond confirming a list of names. These nine questions can help you see whether your beneficiary choices still support your full retirement and estate plan.
1. Are Your Primary and Contingent Beneficiaries Current?
Start by getting the actual beneficiary record for each account or policy. Do not rely on memory or an old copy in your files.
Review accounts such as:
Traditional, Roth, SEP, and SIMPLE IRAs
401(k), 403(b), and other workplace retirement plans
Life insurance policies and annuities
Bank accounts with payable-on-death, or POD, instructions
Brokerage accounts with transfer-on-death, or TOD, instructions
Health savings accounts
Check both primary and contingent beneficiaries. The primary beneficiary is first in line. A contingent beneficiary may receive the asset if the primary beneficiary dies before you or cannot receive it.
If you named more than one person, also check what happens if one of them dies before you. For example, would that person's share pass to their children or be divided among the other surviving beneficiaries? Terms such as per stirpes can affect that answer.
2. Do Your Beneficiary Forms Match Your Will or Trust?
Your will, trust, and beneficiary forms need to work together. They do not need to use the same beneficiaries for each asset, but any differences should be intentional.
For example, your will may divide your property equally among your children. Your IRA could still name only one child because you completed the form years ago. In most cases, the IRA custodian will follow its beneficiary record rather than the instructions in your will.
After updating an estate plan, ask your attorney which accounts need new beneficiary forms. Then confirm that each financial institution accepted the change. A document in your files does not help if the custodian never processed it.
3. If You Plan to Give to Charity, Are You Leaving the Right Assets?
The type of asset you leave can affect what a person or charity receives after taxes.
Distributions from a traditional IRA are generally taxable income. A qualified tax-exempt charity can often receive those assets without the income tax an individual beneficiary may owe. This can make pre-tax retirement accounts worth considering for charitable gifts.
Roth IRA money or taxable investments may be more useful to family members. Qualified Roth distributions are generally tax-free, although inherited Roth IRAs can still be subject to distribution deadlines. Taxable assets may receive a basis adjustment at death, depending on the asset and the circumstances.
Do not simply name the same percentages on every account without reviewing the tax result. Coordinate charitable plans with your tax professional, financial advisor, and estate planning attorney.
4. Will Equal Percentages Create an Unequal Result?
A 50% share of one account may not be worth the same as a 50% share of another.
Suppose one child receives part of a traditional IRA and another receives part of a Roth IRA. The traditional IRA beneficiary may owe income tax as money comes out. The Roth beneficiary may not owe that same tax if the distribution rules are met.
The beneficiaries' own situations can also differ. One child may be in a high tax bracket while another earns less. One may be financially organized while another may need help managing a large amount.
Look at estimated dollars as well as percentages. Ask:
What might each person receive after taxes?
How quickly could each account have to be withdrawn?
Can each beneficiary manage the amount responsibly?
Would a trust or another structure be appropriate?
Fair does not have to mean that each beneficiary is listed the same way on each account. It should mean that your choices reflect what you intend.
5. Is Your Estate Named as a Beneficiary?
Sometimes an estate is named on purpose. In other cases, an account may pass to the estate because of the default rules in the account agreement.
If no valid beneficiary is on file, the result depends on the IRA agreement, insurance contract, or retirement plan document. The default could be a spouse, children, other heirs, or the estate. Do not assume you know the answer without checking.
Naming an estate can create added probate work and reduce the distribution choices available for a retirement account. Under IRS inherited IRA rules, an estate is not an individual designated beneficiary. If an IRA owner dies before the required beginning date, the five-year rule may apply. If the owner dies on or after that date, a different payout rule based on the owner's remaining life expectancy may apply. A workplace plan can also have its own payout terms.
The important question is whether the estate is listed by design or by accident.
6. Is a Trust Named as a Beneficiary?
A trust can help manage money for a minor, a person with a disability, or someone who may need protection from creditors, poor decisions, or outside influence. But naming a trust on an IRA can add tax and legal complexity.
Some trusts can qualify as see-through trusts for inherited IRA purposes if they meet specific requirements. The IRS lists several conditions, including that the trust is valid under state law, becomes irrevocable at death, has identifiable beneficiaries, and provides required documents to the IRA custodian.
Trust income tax brackets are also compressed. If taxable IRA distributions stay inside the trust, they may reach higher tax rates much sooner than income reported by an individual. That does not mean a trust should not be used. It means the trust must be drafted and managed with the retirement account rules in mind.
Ask why the trust was named and whether that reason still applies. Also confirm that the trustee and successor trustee are still willing and able to serve.
7. Have You Named a Minor or Someone Who Needs Help Managing Money?
A minor may inherit an asset, but usually cannot control it directly. If no plan is in place, a court may need to appoint someone to manage the money until the child reaches the age set by state law.
Depending on your goals, an attorney may discuss options such as:
A trust with instructions for how and when money may be used
A custodial account under a state's Uniform Transfers to Minors Act or Uniform Gifts to Minors Act
A responsible adult or qualified trustee to manage the assets
If a beneficiary has a disability or receives needs-based government benefits, the planning may require even more care. A direct inheritance could affect eligibility for certain programs. An attorney who works with special needs planning can help you consider the right structure.
8. How Will the Inherited IRA Rules Affect Your Beneficiaries?
Most non-spouse beneficiaries who inherit a retirement account after 2019 are subject to a 10-year rule. In general, the account must be empty by December 31 of the tenth year after the owner's death.
The timing inside that 10-year period depends on the account and the owner's age at death. If the owner died before required minimum distributions had begun, many non-spouse beneficiaries do not have an annual withdrawal requirement before year 10. If the owner died on or after the required beginning date, annual distributions may be required during the 10-year period as well.
Some people are considered eligible designated beneficiaries and may qualify for different rules. The IRS includes a surviving spouse, the owner's minor child, a disabled or chronically ill person, and someone who is not more than 10 years younger than the owner. That last group can include a sibling who is close in age, if the sibling is named as the beneficiary.
These rules can affect a beneficiary's tax bracket, Medicare premiums, and other parts of a financial plan. For more detail, see:
9. Could Estate or Inheritance Taxes Affect the Plan?
Federal estate tax affects a small share of estates, but it still belongs on the review list.
For a person who dies in 2026, the federal estate tax filing threshold is $15 million. Married couples should not simply assume they have a combined $30 million exemption. Using a deceased spouse's unused exemption generally requires a timely federal estate tax return and a portability election.
State rules can also be different. Some states have their own estate tax, an inheritance tax, or both, with much lower exemptions. Even when estate tax is not a concern, income taxes on inherited retirement accounts may still reduce what beneficiaries keep.
If your estate may be near a federal or state threshold, coordinate the beneficiary review with your estate planning attorney and tax professional.
When Should You Review Your Beneficiary Designations?
A review every one or two years is a useful starting point. You should also check after a major life event, including:
Marriage, divorce, or remarriage
Death of a spouse or beneficiary
Birth or adoption of a child or grandchild
A beneficiary becoming disabled or needing financial support
A major change in a beneficiary's relationship or financial condition
Creation or revision of a will or trust
Opening, transferring, or consolidating an account
A large change in the value of an account or policy
Keep confirmation copies after each institution accepts a change. If a form allows percentages, make sure they total 100%. Also review names, dates of birth, addresses, and other identifying information for accuracy.
Beneficiary Designation Review FAQs
Does a will override a beneficiary designation?
Usually, no. An account with a valid beneficiary designation generally passes under that form. Your will usually controls assets that pass through your probate estate. State law and account terms can affect the result, so coordinate the documents with an attorney.
Does divorce automatically remove an ex-spouse as beneficiary?
Do not count on it. State laws vary, and federal rules may apply to some workplace retirement plans. Review and update each form as part of the divorce process, then confirm that the institution accepted it.
What happens if a beneficiary dies before me?
The answer depends on the form and the account rules. The share may pass to that beneficiary's descendants, be divided among the surviving beneficiaries, or follow the account's default rules. This is why contingent beneficiaries and terms such as per stirpes need careful review.
Can I name a trust as the beneficiary of an IRA?
Yes, but the trust needs to be drafted with inherited retirement account rules in mind. Naming a trust can change the payout schedule, tax treatment, and control of the money. Ask your attorney and tax professional to review the trust before changing the beneficiary form.
Turn the Nine Questions Into an Action Plan
You do not need to solve each issue from memory. Start by gathering the current beneficiary record for each account. Then work through the questions one at a time.
Download the beneficiary review checklist and mark anything that needs more information. A question you cannot answer gives you something specific to take to your financial advisor, estate planning attorney, tax professional, plan administrator, or insurance company.
If you would like to see how beneficiary planning fits with the rest of your retirement decisions, learn more about the Simply Retirement Roadmap™.
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