What Can Override a Will? A Comprehensive Guide to Beneficiary Designations and Other Overrides

Understanding How Your Will Can Be Impacted by Other Documents

Creating a will is a crucial step in ensuring your wishes are followed after your passing. However, it’s important to remember that your will is not the only legal document that can affect how your assets are distributed. In some cases, beneficiary designations and other documents can override your will, leading to unintended consequences.

This guide will delve into the various situations where beneficiary designations and other documents can override your will, providing you with the knowledge you need to ensure your wishes are truly respected.

Beneficiary Designations: A Powerful Override

Beneficiary designations are instructions attached to specific assets, such as life insurance policies, retirement accounts, and bank accounts, that dictate who will inherit those assets upon your death. These designations often take precedence over your will, meaning that the named beneficiary will receive the asset regardless of what your will states.

Here’s a closer look at how beneficiary designations can override your will:

Life Insurance:

• Employer-Sponsored Plans: If your life insurance policy is through your employer, the beneficiary you named in your plan documents will likely take precedence over the beneficiary named in your will.
• Individual Plans: For individual life insurance policies, the beneficiary you designated with your insurance company will receive the death benefit, regardless of your will’s provisions.

Retirement Accounts:

• 401(k) Accounts: If you are legally married, your spouse is automatically considered the beneficiary of your 401(k) account, even if you named someone else in your will. To override this, your spouse must sign a notarized waiver relinquishing their rights to the funds.
• Individual Retirement Accounts (IRAs): In most states, you can name anyone as your IRA beneficiary without needing a spousal waiver.

Bank & Brokerage Accounts:

• Payable-on-Death (POD) Beneficiaries: When you open a bank or brokerage account, you can designate a POD beneficiary who will inherit the assets directly upon your death, bypassing probate. However, the named POD will receive the assets regardless of your will’s instructions.

Understanding the Implications:

It’s crucial to review your beneficiary designations regularly and ensure they align with your current wishes. If there are discrepancies between your will and your beneficiary designations, the latter will prevail.

Other Documents That Can Override Your Will

While beneficiary designations are the most common overrides, other documents can also impact your will’s effectiveness:

Living Trusts:

• Assets transferred into a living trust during your lifetime will be distributed according to the trust’s instructions, regardless of your will.

Community Property Agreements:

• In community property states, assets acquired during your marriage are owned equally by both spouses. These assets will automatically pass to your surviving spouse, regardless of your will’s provisions.

Prenuptial Agreements:

• Prenuptial agreements can dictate how assets will be divided in the event of divorce or death, potentially overriding your will’s provisions.

Joint Tenancy Agreements:

• Assets held in joint tenancy with another person will automatically pass to the surviving joint tenant upon your death, regardless of your will.

Powers of Attorney:

• If you have granted someone power of attorney over your financial affairs, they may have the authority to make decisions that could impact the distribution of your assets, potentially overriding your will’s instructions.

Protecting Your Wishes: Consulting with an Estate Planning Attorney

Navigating the complexities of estate planning can be overwhelming. Consulting with an experienced estate planning attorney can provide invaluable guidance and ensure your wishes are protected. An attorney can help you:

• Review your beneficiary designations and ensure they align with your will.
• Create or update your will to reflect your current wishes.
• Establish a living trust to protect your assets and ensure their distribution according to your desires.
• Draft prenuptial or postnuptial agreements to protect your assets in the event of divorce or death.
• Understand the impact of other legal documents on your estate plan.

By working with an estate planning attorney, you can gain peace of mind knowing that your assets will be distributed according to your wishes, even if unforeseen circumstances arise.

Frequently Asked Questions

1. Can I change my beneficiary designations at any time?

Yes, you can change your beneficiary designations at any time by contacting the financial institution or insurance company that holds the asset.

2. What happens if I forget to update my beneficiary designations?

If you forget to update your beneficiary designations, the assets will be distributed according to the designations on file, regardless of your current wishes.

3. Can I contest a beneficiary designation?

In some cases, a beneficiary designation can be contested if it was made under duress, undue influence, or fraud.

4. How can I ensure my will is legally valid?

To ensure your will is legally valid, it’s important to have it drafted by an experienced estate planning attorney who can ensure it meets all the requirements of your state.

5. Should I update my estate plan regularly?

It’s important to review and update your estate plan regularly to reflect any changes in your life, such as marriage, divorce, the birth of a child, or the acquisition of new assets.

By understanding how beneficiary designations and other documents can override your will, you can take steps to protect your wishes and ensure your assets are distributed according to your intentions. Consulting with an experienced estate planning attorney can provide invaluable guidance and help you navigate the complexities of estate planning.