Do I Need A Will If I Have Beneficiaries?
Even if your beneficiary designations have been set, a will provides an extensive and complete plan for your estate. This includes guidelines for covering assets and making critical decisions that designations may overlook.
What Is The Purpose Of A Will?
A will is somewhat straightforward documentation in which you declare what needs to happen to your property following your passing. You are also able to use your will to designate guardians for your minor children, appoint an executor, debt forgiveness, and establish how to pay your taxes.
Following your passing, your executor will pay any debts or taxes and deals with who receives what on the basis of the conditions in your will. This court-governed and clearly-structured process is termed as “probate” and has been known for being prolonged and costly.
Your will can include such things as:
- Beneficiaries
- Business assets/distribution
- Care for your pets
- Disposal of debts/taxes
- Guardianship for your children and their inheritance
- Property beneficiaries
- The executor of your estate
What To Know About Beneficiary Designations
Many individuals often prioritize a will for estate planning, but there are some valuable assets that are governed by separate documents. Beneficiary designations are a feature on certain accounts allowing you to name either a person or entity to receive a specific asset directly upon your death.
Beneficiary designations are commonly featured for:
- Life insurance policies
- Retirement savings accounts like IRAs and 401(k)s
- Annuities
- Bank and investment accounts, utilizing either Transfer on Death (TOD) or Payable on Death (POD) accounts
The primary function of a beneficiary designation is to transfer specific assets outside of the court-supervised process that is referred to as probate. However, it’s vital to note this direct transfer mechanism is limited solely to the account that is attached to it.
How Do Wills And Beneficiaries Interact?
It’s important to grasp the legal hierarchy between wills and beneficiary designations. For example, a beneficiary designation on an account ultimately overrides any instructions that may be conflicting in a will.
This designation is a contract between you and a financial institution, and they are legally bound to pay proceeds to the designated beneficiary, regardless of what a will might state. The difference between beneficiary designations and wills is often a large component of estate disputes.
One example of a dispute could be a case where your will states your entire estate should be divided among your children equally, but you have previously named your sibling as your life insurance policy beneficiary. This means the sibling will receive the payout, and the will’s instructions will only be applied to your other assets.
The will’s instructions can become relevant in the event an asset has a designated beneficiary, but this primary beneficiary has since died and there was no backup beneficiary named. In this case, the asset has no living designated recipient, meaning it will become part of the residuary and will be distributed according to your will’s terms.
The Distribution Of Personal Property And Other Assets
A will is the only way to directly transfer tangible personal property. Objects like furniture cannot have beneficiary designations attached to them. Without an existing will, possession distribution will be up to state intestacy laws, which divide property among the closest living relatives.
Statutory distribution will not account for specific wishes for certain personal items. A will, meanwhile, allows you to make specific bequests, ensuring your valuables go exactly where you wish. The level of detail in a will can prevent family disputes and ensure your property is distributed the way you intended.
Source:
- “Do I Need A Will If I Have Beneficiaries?” Retrieved on July 15, 2025 from https://legalclarity.org/do-i-need-a-will-if-i-have-beneficiaries
Estate Planning
Discussions about child custody issues are always difficult during a divorce. While there is no way to make them easy or comfortable, you can find ways to work together. The collaborative divorce process helps with tools and professionals to make child custody and other decisions a little more manageable. By working together as a team, you’re able to make the decisions that are best for the kids.
Collaborative divorce can make these challenging times more manageable. It requires you to work with your spouse at a time when you have decided you need to go your separate ways. When it comes to child custody, though, you want to do all you can to make the right parenting decisions. Collaborative divorce can help create pathways for you to cooperate. If you live in the Phoenix/Scottsdale area and want to learn more about collaborative divorce, contact Ogborne Law today.
