Tip – Remember to check your beneficiary designations on insurance policies, IRAs, 401Ks, and investments.
Individuals named as beneficiaries on insurance policies and financial accounts can receive those funds directly upon someone’s death, without waiting for the estate to go through probate. The following example shows what can happen when beneficiary designations aren’t kept up to date:
After her husband passed away, one of my clients came to see me about her husband’s estate. She said that her husband had named her as his beneficiary on several investment accounts but that he had failed to name her on one account that he had before they were married. When she contacted the financial institution, they told her that she needed Letters Testamentary before they would
release the funds to her.
I explained to her that she would need to probate her husband’s estate to obtain Letters Testamentary. But as we talked, we determined that her husband had written a Will, leaving everything to her and that his estate was less than $100,000, so she could request the funds using a Small Estate Affidavit, instead of having to probate.
Some people intentionally name their Estate as the beneficiary, so the Estate has funds to pay creditors and final expenses and can then distribute the remainder to designated individuals. In many cases, though, it’s better to name individuals directly as beneficiaries, so the money passes to them outright rather than going through probate.
Having seen this issue come up again and again, I encourage clients to review all their investment accounts and confirm that their beneficiary designations actually reflect who they want their assets to go to. Even if you’re confident the designations are correct, it’s worth taking the time to check each one.
Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.
June 2026