Many retirees assume their will controls everything, but payable-on-death (POD) designations often take priority. Banks, retirement accounts, and even brokerage firms follow beneficiary forms, not wills. This means carefully written estate plans can be undone in seconds by old paperwork. Families are left confused and sometimes furious. Here are 10 POD designations that can override your will.
1. Checking Accounts With POD Beneficiaries
Even if your will says funds should be divided equally, a POD designation funnels money directly to the listed person. Siblings cut off from access may challenge the estate. Wills don’t change this rule. Banks follow forms, not families.
2. Savings Accounts With Outdated Beneficiaries
Old designations sometimes leave funds to former spouses or deceased relatives. Retirees who forget updates create chaos. Savings accounts often hold substantial assets. Beneficiary forms quietly outweigh will instructions.
3. Certificates of Deposit (CDs)
CDs often allow POD beneficiaries. Unfortunately, many retirees rarely think of them as estate assets, but they bypass probate completely. This shocks heirs, expecting them to be shared. Simple CDs can create major disputes.
4. Individual Retirement Accounts (IRAs)
IRAs always follow beneficiary designations. A will has no power here. Even if you leave an ex-spouse on forms, it can be a costly mistake. It will lock in outcomes you never wanted and potentially undercut your current partner or other family members. Beneficiaries must match intent.
5. 401(k) Accounts
Employer plans also bypass wills. Retirees relying on outdated HR paperwork risk disinheriting current spouses. Federal law often protects listed beneficiaries first. This creates legal nightmares.
6. Brokerage Accounts
Investment firms allow transfer-on-death setups. If you only assign one child as a beneficiary, it creates family imbalance. Wills cannot correct this oversight. Brokerage accounts need regular reviews.
7. Life Insurance Policies
Life insurance is entirely separate from wills. Policies pay out directly to named beneficiaries. Anyone who ignores this step risks leaving assets to unintended people. Insurance forms are binding.
8. Annuities With Named Beneficiaries
Like life insurance, annuities pay directly to the listed individual. Wills have no authority. Retirees misaligning annuities with estate plans create contradictions. Beneficiaries must be consistent.
9. Joint Accounts With Survivorship Rights
Jointly owned accounts default to the surviving owner, no matter what the will says. If you are thinking about adding one child for convenience-sake, think again. This move often cuts out others, leading to accusations of favoritism. Joint ownership trumps estate documents.
10. Transfer-on-Death Deeds for Real Estate
Some states allow TOD deeds for homes. These skip probate entirely. Retirees who don’t coordinate TOD deeds with wills confuse heirs. Real estate disputes erupt quickly.
The Takeaway on POD Designations
Payable-on-death designations seem simple but carry huge consequences. Every retiree must align them with their estate plans to avoid contradictions. Wills don’t override beneficiary forms. Regular reviews prevent family conflict. Estate planning is about details, not assumptions.
Have you checked your payable-on-death designations recently, or do you assume your will still controls them?
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