12/12/2025
Why Your 401k Doesn't Follow Your Will
Here's a critical estate planning mistake: Your will controls most of your assets. Your 401k? It doesn't.
How It Works: When you opened your 401k or IRA, you filled out a beneficiary form naming who gets the money when you pass. That form is a legal contract with your employer or financial institution. It overrides your will, your trust, and everything else.
The Problem: Most people fill out that form once and never touch it again. Then life happens—you get married, divorced, have kids, or relationships change. Your will gets updated, but that old beneficiary form stays the same. Result? Your 401k goes to an ex-spouse or outdated beneficiary while your current family gets nothing.
Real Example: A Waco client had $400,000 in a 401k with his ex-wife listed as beneficiary. His new will left everything to his current wife and children. When he passed, the 401k went directly to the ex-wife—completely bypassing his estate plan. His family had to hire an attorney to challenge it (and lost).
What You Should Do:
- Pull up your 401k and IRA statements right now
- Check who's listed as primary and contingent beneficiary
- Update beneficiary forms if you've had major life changes
- Consider naming your trust as beneficiary (in some cases) to maintain control
- Review these forms every 3-5 years, especially after marriage, divorce, or births
Your retirement accounts are often your largest assets. Don't let an outdated form decide who gets them.
