You want to ensure that your wishes are honored when you are no longer here, and your will or living trust are powerful tools that you should have prepared for this very reason. You should also be certain that your account beneficiary designations and your overall estate plan coincide in order to avoid any conflicts.
A recent article in The Slott Report titled “Beneficiary Form Review: The Gift That Keeps on Giving” discusses this issue in detail.
Essentially, designating a beneficiary or beneficiaries on a beneficiary form can allow you to exempt a given account or policy entirely out of your probate estate. However, when you avoid probate, your will has no control over who inherits such account or policy. Accordingly, if you do not review and update your beneficiary forms, you risk giving your assets to the wrong beneficiary (e.g., an ex-spouse on your 401k plan).
For more information, please visit my estate planning Web site.