Beneficiary Designation
Account-level instructions that override the will.
What is Beneficiary Designation?
Retirement accounts, life insurance, and TOD accounts pass by designation, outside the will and outside probate. A stale designation - an ex-spouse still named - beats whatever the will says, which makes periodic review essential.
Beneficiary Designation: a worked example
An unchanged 401(k) beneficiary sends the account to an ex-spouse regardless of the current will.
More terms in Planning, Insurance & Estate
Emergency Fund
Liquid reserves covering several months of essential expenses.
Net Worth
Total assets minus total liabilities.
Term Life Insurance
Pure death benefit for a fixed period, no cash value.
Whole Life Insurance
Permanent coverage with a guaranteed cash value component.
Disability Insurance
Income replacement if illness or injury prevents you from working.
Long-Term Care Insurance
Covers extended custodial care that health insurance and Medicare do not.
Will vs. Revocable Trust
Directs assets through probate versus holding them outside probate.
Probate
The court process validating a will and distributing an estate.