Beneficiary forms and titles trump the will
The will says who gets what. The beneficiary form says who actually gets it. When they disagree, the form wins.
A will names the people a client wants to get the money. The account doesn't care. Joint tenancy, transfer-on-death forms, and retirement beneficiary designations move assets directly to whoever is named on the form, and each of those overrides the will. A Financial Planning review lays out where the failures happen and what to fix.
The failures show up in ordinary account titles. Rebecca Carter, principal at Owings Mills-based Friedman, Framme & Thrush, points to the joint savings account: if the co-owner is an ex-husband, the account becomes his. Elderly parents often add one child to an account to avoid probate, leaving siblings to fight over what Mom "really meant."
Erin Botsford, founder of The Advisor Authority, saw the cost firsthand with a blended couple. Each spouse held joint tenancy with right of survivorship over the other. The forms cut four children from earlier marriages out of the estate, despite what the wills said.
The remedies are administrative. Retirement accounts, TODs, and real estate need to match the estate plan; trust assets have to be titled to the trust. Where the transfer never happened, a pour-over will catches what the trust misses, says Kristin Yokomoto, a partner at Newport Beach-based FBT Gibbons. Stephen Dissette, an RIA representative at Horter Investment Management in Trail Creek, Indiana, tells clients in second and third marriages to bring in an estate attorney to keep children's shares separate. The fee is small against the financial and family damage of a wrong form.
The review itself is free. Ask each client to pull every beneficiary form and property deed into one meeting, and reconcile them against the will. When the title and the will disagree, the will is the fiction.
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