Your Estate Plan Says One Thing. Your Beneficiary Designations Say Another.

You updated your estate plan last year. New trust, refreshed will, and current powers of attorney. Your attorney signed off. You feel good. 

Your IRA still goes to your ex-spouse. 

This isn’t a hypothetical. It happens regularly, and it’s nearly impossible to reverse after the fact. 

Here’s the part most people don’t realize: your estate plan governs only assets that are directed to it. Everything with beneficiary designations other than your Trust passes outside your estate entirely: IRAs, 401(k)s, life insurance, jointly-titled accounts, and transfer-on-death accounts. All of it goes directly to whoever you named on a form. 

ERISA, the federal law governing retirement accounts, makes those designations nearly impossible to override. A court can overturn a lot of things. A stale beneficiary form on a $2 million IRA is not usually one of them. 

Why this happens 

Beneficiary designations get filled out once, at enrollment, when you open the account, when you’re 28 and not thinking about any of this. Then life moves. Marriage, divorce, kids, remarriage, death of a named beneficiary, a changed relationship with a sibling. The account stays. The form doesn’t update itself. 

Meanwhile, most estate planning attorneys and financial advisors work in silos. Your attorney drafts the trust documents. Your plan administrator holds the retirement account forms. Your life insurance carrier has the policy beneficiaries. None of these parties are required to talk to each other, and in most cases, they don’t. 

That is The Coordination Gap in its most concrete form. No single document reveals the full picture. No single professional is responsible for making sure it all lines up. 

What the risk actually looks like 

Consider a few common scenarios: 

• A surviving spouse expects to inherit an IRA, but the primary beneficiary named at account opening was a parent who has since passed, and no contingent beneficiary was ever named. The account goes to probate. It takes 18 months and significant legal fees to distribute. 

• A business owner remarries, updates his estate plan and his will, but forgets the life insurance policy from his first marriage. His ex-wife is still the named beneficiary. When he dies, she receives the $1.5 million death benefit. 

• A pre-retiree names her adult children as equal beneficiaries on a retirement account, but her children have very different financial situations. One is in a high tax bracket, and the required minimum distributions create a significant, unplanned tax burden. Nobody planned for it. 

These situations are not as rare as you may think. They’re the default outcome when beneficiary designations and estate plans have never been reconciled. 

What to do about it 

The fix is straightforward, but it requires a consolidated view across all of your accounts, not just the ones your advisor manages. 

1. Pull every beneficiary designation you have. Retirement accounts at every employer (current and past), IRAs, life insurance policies, and any transfer-on-death designations on brokerage or bank accounts. Most institutions let you download or request these.
2. Compare them to your current estate plan. The question is not just whether the name is right. It’s whether the structure matches your intent. If your trust is the intended beneficiary of an IRA, the trust must be properly drafted to receive it. Otherwise the tax treatment changes significantly. 
3. Check for missing contingent beneficiaries. If your primary beneficiary predeceases you and there is no contingent named, the account typically goes to probate. Name a backup. 
4. Do this again every three to five years, or after any major life event. Beneficiary forms don’t have expiration dates. Your life does change. 

The coordination conversation 

This is exactly the kind of issue that falls through the cracks when your legal, financial, and tax advisors are not in regular communication. Your estate attorney may never see your 401(k) beneficiary form. Your financial advisor may not know what the trust says about retirement accounts. Your CPA may be unaware of both. 

At Voisard, we build this conversation into the planning process specifically because this is where estates most commonly go wrong, not in the documents themselves, but in the gaps between them. 

Your estate plan can be perfect and still fail if the beneficiary designations don’t match it. 

If you’re not sure your beneficiary designations line up with your estate plan, that’s a conversation worth having now, before it becomes a problem someone else has to solve.