How to name a beneficiary on your accounts
Name a primary and a backup beneficiary on every retirement account, policy and bank account, and update them after life changes.
New to this?
A beneficiary is the person or group you choose to receive an account or insurance payout when you die. You name them on a short form from the bank, employer or insurer. The money then goes straight to them, usually without a court process. Retirement accounts, life insurance and many bank accounts let you name one.
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Myth
My will says who gets everything, so I don't need to fill out beneficiary forms.
Truth
Life insurance and retirement plans go to the person named on the form, no matter what your will says. In the example, $124,000 of Alex's $126,000 skips the will entirely.
Worth memorizing
- 1
The beneficiary form usually overrides your will.
Life insurance, retirement plans and payable on death or transfer on death accounts go to whoever is on the form.
- 2
Always name a backup.
A contingent beneficiary gets the money if your primary beneficiary dies before you. Without one, it may go through probate.
- 3
Update after every big change.
Marriage, divorce, a new child or a death in the family won't change the form by itself. You have to.
I'd block out 20 minutes this week and check every beneficiary form: work retirement plan, IRA, life insurance and bank accounts. It's the cheapest estate planning there is, and an old form naming an ex is a mistake your family can't fix later.
Do this today
List every retirement account, life insurance policy and bank account you have. Log in to each one, check the beneficiary section, and add or fix a primary and a contingent beneficiary with shares that add up to 100%.
Practice
1 of 3
Your will leaves everything to your partner, but your 401(k) form names your brother. Who generally gets the 401(k)?
The beneficiary form generally controls a retirement plan, no matter what the will says. If you are married, spousal rules can also apply.
2 of 3
What does a contingent beneficiary do?
The contingent beneficiary is the backup. They receive the money only if the primary beneficiary isn't alive.
3 of 3
You have a $40,000 IRA and name two children at 50% each. How much does each one get?
$40,000 × 50% = $20,000 each. The shares on the form must add up to 100%.
Tips
Start with your largest accounts
Check your workplace retirement plan and any life insurance first. They often hold the most money and are the most likely to have an old or blank form.
Add POD to bank accounts
Ask your bank or credit union to add a payable on death beneficiary to checking, savings and CDs. It is usually a free form, online or at a branch.
Use percentages that add to 100
With more than one beneficiary, list each person's share, like 50% and 50%. NAIC notes you need to state the percentage each one gets.
Don't name a minor directly
A child can't legally manage a large sum, so a court may appoint someone. Name a trust or a custodian for the child instead, and ask a lawyer how in your state.
A worked example: how much skips the will
Alex, 34, has a will leaving everything to his partner. He adds up his accounts to see how much his beneficiary forms control instead.
- $48,000 + $70,000 + $6,000 = $124,000 goes to whoever is named on the forms. Only the $2,000 in checking follows his will.
- $124,000 ÷ $126,000 is about 98%. Alex finds that his work life policy still names his sister from before he met his partner.
- He updates the 401(k) and the policy to name his partner as primary and his sister as contingent, and adds a POD beneficiary to checking.
- 401(k)+$48,000
- Life insurance from work+$70,000
- Savings with a POD beneficiary+$6,000
- Passes by beneficiary form=$124,000
- Checking, no beneficiary+$2,000
- Everything=$126,000
Common mistakes
Leaving the form blank
With no beneficiary, the account usually goes to your estate and through probate, which takes longer and costs more. Some plans have default rules that may not match your wishes.
Forgetting an ex on the form
Divorce doesn't always change a beneficiary designation. Check every account after a divorce or breakup and replace the name yourself.
Skipping the contingent beneficiary
If your only beneficiary dies before you, or with you, the money may end up in probate. A backup name prevents that.
Going deeper
A beneficiary is the person you name on an account or policy to receive it when you die, and that form usually decides who gets the money, even if your will says something else. Name a primary and a backup on every account that allows it, and check them after any big life change.
The form controls the money
Money in a retirement plan or life insurance policy goes to the beneficiaries you named on it, no matter whom you name in your will. Joint accounts with right of survivorship go to the surviving owner.
Primary and contingent
The primary beneficiary gets the money if they outlive you. The contingent beneficiary gets it if the primary has died first. Name both.
Spouses have rights in 401(k) plans
In most 401(k) plans, a surviving spouse automatically receives the account. To name someone else, your spouse generally must sign a written consent witnessed by a notary or plan representative.
Beneficiary designations skip probate
Payable on death bank accounts and transfer on death investment accounts pass straight to the person named, without probate. They usually just need a death certificate and ID.
Which accounts let you name a beneficiary
Workplace retirement plans like a 401(k) or 403(b), IRAs, life insurance, annuities and many pensions all ask for a beneficiary. So can bank accounts, through a payable on death (POD) designation, and brokerage accounts, through transfer on death (TOD) registration.
In some states you can also name a beneficiary for a car or a home with a transfer on death form or deed. Rules vary by state, so check with your state's motor vehicle office or a local lawyer.
Why the form beats your will
A beneficiary designation is a contract with the bank, plan or insurer. When you die, they pay the person on their form. A will only controls property that doesn't already have a named beneficiary or co-owner.
That is why an out-of-date form causes so much trouble. If your form still names a former partner, the plan may be required to pay them even if your will leaves everything to someone else. Some states have rules that revoke an ex-spouse's designation after divorce, but they don't cover every account, so update the form yourself.
How to fill out the form
Log in to the account or ask HR for the beneficiary form. For each person, give their full legal name, relationship, date of birth and, if asked, their Social Security number. Make sure the percentages add up to 100%.
Name at least one contingent beneficiary. If you name a trust or a charity, use its exact legal name. Save a screenshot or copy of the confirmation, and tell your beneficiaries where your accounts are.
Married with a 401(k)
Federal law protects spouses in most workplace retirement plans. The Department of Labor explains that in most 401(k) plans, your surviving spouse automatically receives the account if you die, and choosing anyone else requires your spouse's written consent.
IRAs follow different rules. In community property states, a spouse may have a claim to part of an IRA too. If you want to name someone other than your spouse, ask the plan and a lawyer what's required.
When to review your choices
Review your forms after a marriage, a divorce, the birth or adoption of a child, or the death of anyone you named. Also check when you change jobs or roll a 401(k) into an IRA, since the new account starts with no beneficiary.
NAIC suggests checking life insurance beneficiaries every few years. A once-a-year check, such as during open enrollment, is an easy habit.
Questions people ask
Does a beneficiary override a will?
Generally yes. Life insurance, retirement accounts and POD or TOD accounts pass to the named beneficiary regardless of the will. A will covers property without a beneficiary or co-owner.
Can I name more than one beneficiary?
Yes. You can name several primary and contingent beneficiaries and set a percentage for each. The percentages for each level must add up to 100%.
Can I name my estate as beneficiary?
You can, but it sends the money through probate, where creditors can make claims and the process takes longer. Naming people or a trust is usually faster for your family.
Do beneficiaries pay tax on what they inherit?
Life insurance paid because of a death generally isn't taxable income, according to the IRS. Money from a traditional 401(k) or IRA is usually taxed when the beneficiary withdraws it. Rules depend on the account and the beneficiary.
How do I find out who my beneficiary is?
Log in to each account and look for a beneficiaries section, or call the plan, bank or insurer. Ask HR about workplace retirement and life insurance plans.
Printable worksheet with answer key, free for classrooms. Lesson plan for this unit.
Sources
- U.S. Navy JAG: Wills and basic estate planning
- U.S. Department of Labor: FAQs about retirement plans and ERISA
- Investor.gov: Transferring assets
- NAIC: Tips to help you buy life insurance
- CFPB: What happens if I have a joint bank account with someone who died?
- IRS: Life insurance and disability insurance proceeds
Updated October 4, 2026. General education, not personalized financial, tax or legal advice. Figures are examples. Check current rates and limits before you act.
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