Here's a fact that surprises most people: some of your biggest assets won't be controlled by your will at all. Retirement accounts, life insurance, and others pass straight to whoever you named as beneficiary — no matter what your will says. That's powerful when it's current, and a quiet disaster when it's not. An audit is how you check.
What even has a beneficiary
More than you'd think. The usual list:
- Retirement accounts — 401(k)s, IRAs, 403(b)s.
- Life insurance and annuities.
- HSAs and some pensions.
- Bank and brokerage accounts with a TOD/POD ("transfer on death" / "payable on death") designation.
If you can name a beneficiary on it, it belongs in your audit.
Why this beats probate
A named beneficiary designation does two valuable things. It overrides your will — the designation wins, full stop — and it lets the asset bypass probate entirely. Instead of waiting months for a court to distribute the money, the beneficiary typically claims it with a death certificate and a form: faster, private, and direct. That's the upside. The catch is that "the designation wins" cuts both ways — if it's wrong, your will can't fix it.
How the audit works
Set aside an afternoon and go account by account:
- List every account that can carry a beneficiary.
- Pull the current designation for each — actually look, don't assume. People are routinely shocked by what they find.
- Check both tiers — the primary and the contingent (backup) beneficiary. A missing contingent is one of the most common gaps.
- Compare against real life — marriages, divorces, births, deaths. Has anything changed since you last looked?
The traps to watch for
- The ex-spouse who's still on file. The classic. Designations don't update themselves after a divorce, and the form beats the divorce decree.
- No contingent beneficiary. If your primary predeceases you and there's no backup, the asset can fall back into probate — the very thing you were avoiding.
- Naming a minor directly. Children can't legally receive large sums; without a trust or custodian arrangement, a court may have to step in.
- Naming your estate. This drags the asset into probate and, for retirement accounts, can speed up the income tax bill.
- Stale retirement designations. Under current rules, many non-spouse beneficiaries must empty an inherited IRA within 10 years — worth planning around.
Keep it current
A designation audit isn't a one-time chore. Review every few years, and after any major life event — marriage, divorce, a birth, a death, a new account. It takes an afternoon and a few forms, and it's one of the highest-leverage things you can do to make sure the right money reaches the right people without a court in the middle.
This guide is general information, not legal or tax advice. Beneficiary rules and the tax treatment of inherited accounts depend on your situation and can change. Talk to a qualified attorney or tax professional before acting.