The paperwork nobody remembers signing
Only about one in four Americans has a will, according to a 2025 Caring.com survey. If you’re in that group, good for you (seriously). But a will doesn’t do as much as most people think.
For a lot of families, the biggest accounts they own (a 401(k), an IRA, life insurance through work) never pass through the will at all. They go to whoever is named on a beneficiary form, often one that was filled out in a hurry during the first week of a new job, sometimes decades ago.
Does my will control my 401(k), IRA or life insurance?
Generally, no. Those accounts pay out to the beneficiary named on the account’s own paperwork. Your will can say one thing and the form can say another, and in most cases the form is what the plan follows.
Can an ex-spouse still inherit?
Yes, and it happens. Pennsylvania and New Jersey both have laws that generally cancel an ex-spouse’s beneficiary designation after a divorce. But most employer plans, including 401(k)s and life insurance through work, are governed by federal law, and the U.S. Supreme Court has ruled twice that those plans pay whoever is on the form.
In one case, a state law meant to cancel an ex-wife’s designation didn’t apply, and she kept the life insurance. In another, the ex-wife had given up her rights in the divorce decree, and the plan still paid her, because her name was still on the form (yikes).
Does my spouse have to be my 401(k) beneficiary?
For most 401(k)s, the surviving spouse is entitled to the death benefit unless the spouse has consented to someone else. That surprises people in second marriages more than anyone.
What happens if my beneficiary dies first?
If the person you named is gone and nobody is listed behind them, the money goes wherever the plan’s or the IRA’s paperwork sends it by default. That’s often your estate, which can mean probate. For an IRA left to an estate, the clock to empty the account can also shrink to five years if the owner dies before required distributions begin.
Why this slips through the cracks
None of this shows up on a statement. The forms live with a dozen different companies, they were filled out at different points in your life, and nobody calls when your life changes and the forms don’t. Marriage, divorce, a new baby, a death in the family: each one can quietly make an old form wrong.
Where that leaves you
I’m not going to tell you how to fill out your forms in a blog. The right answer depends on your family, your other documents, and what you want to happen, and getting the pieces to agree with each other is where we can actually help.
So here’s the question worth sitting with: if something happened tomorrow, do you know exactly who would get each of your accounts?
You know where to find me.
Sources
- About one in four Americans has a will (24%, 2025): Caring.com, “2025 Wills and Estate Planning Study”
- Federal law preempts a state law revoking an ex-spouse’s designation for an employer plan; ex-wife kept the life insurance proceeds: U.S. Supreme Court, Egelhoff v. Egelhoff (2001)
- Plan paid the ex-wife named on the form despite her waiver in the divorce decree: U.S. Supreme Court, Kennedy v. Plan Administrator for DuPont Savings and Investment Plan (2009)
- Pennsylvania divorce rule for beneficiary designations: 20 Pa.C.S. § 6111.2
- New Jersey divorce rule for revocable dispositions: N.J.S.A. 3B:3-14
- Death benefit payable to the surviving spouse unless the spouse consents to another beneficiary: IRS, “Fixing common plan mistakes – Failure to obtain spousal consent”
- Default beneficiary when no living beneficiary is named (may be the estate): Ed Slott and Company, The Slott Report, “Without a Living Beneficiary, Does the IRA Go to the Estate?”
- Five-year rule when the beneficiary is not an individual and the owner died before the required beginning date: IRS, Publication 590-B