From Gary Corderman, Principal at Farther and founder of Strategic Wealth Design.
Most people assume their will is the final word on who inherits what. For a large share of what they own, it isn’t.
Retirement accounts, life insurance policies, and most annuities pass by beneficiary designation. That’s the form you filled out when you opened the account. It sits with the custodian, and it operates independently of your estate documents. Where the two disagree, the form generally wins. Your attorney can draft a flawless will and it will not touch those accounts.
What makes this dangerous is when those forms get filled out. You sign one on your first day at a job, in a stack of onboarding paperwork, naming whoever your life contained at that moment. Then you get married, or remarried. A child arrives. You leave that employer and the account stays behind. Ten years pass. Nobody has a reason to open that form again, because nothing has gone wrong.
I’ve seen a carefully updated will leave everything to a current spouse while an untouched 401(k) form from a first marriage said otherwise. The form would have won.
The cost of this one is unusual. Nothing, until it’s everything.
The wider point isn’t really about forms. It’s that this is exactly the kind of thing no single advisor is responsible for. Your 401(k) provider won’t call you. Your attorney doesn’t see the custodian’s records. Your investment advisor manages a different account entirely. Each of them is doing their job correctly, and the gap sits in the space between them.
That space is where most of the expensive problems live.
Gary Corderman
Principal, Farther · Strategic Wealth Design
Book a Strategic Review
A confidential, no obligation second opinion. Thirty minutes, on Gary’s calendar. Not a sales call.
Book a Strategic Review