Account titles and beneficiary designations override wills

Account titles and beneficiary designations commonly determine who receives accounts and property at death, bypassing instructions in a will. Joint tenancy with right of survivorship, payable-on-death designations and named beneficiaries on retirement or insurance plans transfer assets outside probate to the named parties.

Rebecca Carter, a principal at Friedman, Framme & Thrush in Maryland, warned that such arrangements create non-probate transfers: “That asset passes, upon death, not through court, not through probate — doesn’t matter what the will says.” She added that a savings account intended for one person can instead go to a co-owner, including an ex-spouse, if the account title names that person.

Advisors report the issue often arises when people try to avoid probate by adding others to accounts or by creating trusts without moving assets into them. Erin Botsford, founder and CEO of The Advisor Authority, described a case in which a couple with children from prior marriages gave each other joint tenancy with right of survivorship, a step that left their children out of the asset transfers despite provisions in the couples’ wills.

Professionals recommend coordinating estate attorneys and financial planners so account titles, beneficiary designations and estate documents align with the client’s intentions. Rebecca Carter urged clients to match account records to their estate plans. Stephen Dissette, a registered investment advisor representative in Indiana, recommended that blended families consult an estate planning attorney to structure ownership and beneficiary designations appropriately.

Other common mistakes include creating a trust but failing to retitle bank accounts or deeds into the trust. Kristin Yokomoto, a partner at FBT Gibbons in California, suggested using a pour-over will as a backup to transfer any assets not retitled into a trust after death. She encouraged clients to confirm beneficiaries and titles to avoid simple technical errors that can cause disputes.

When assets pass outside probate, ownership transfers immediately to the named co-owner or beneficiary at death. That automatic transfer can conflict with instructions in a will and lead to legal disputes among heirs, particularly after divorce, remarriage or in blended-family situations.

Estate professionals advise checking account titles, verifying beneficiary designations on retirement and insurance plans, retitling property into a trust if that is the plan, and consulting an estate planning attorney to ensure documents and account records produce the intended results.