That beneficiary designation you filled out at your first job? The life insurance form from your starter marriage? They’re still out there. And when you die, they control—not your will, not your trust, not what you actually want. Your carefully crafted estate plan becomes irrelevant the moment a twenty-year-old form names someone you haven’t spoken to in a decade.
At Boroja, Bernier & Associates, we don’t let that happen. We review your beneficiary designations, identify conflicts, and show you exactly how to fix them so your plan actually works as a whole.
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The Invisible Landmine in Almost Every Estate Plan
Here’s a scenario we’ve seen play out more times than we can count:
Dad dies. The family gathers. The attorney reads the will: everything divided equally among the three kids, just like Dad always said. Everyone nods. This is what they expected.
Then someone checks Dad’s 401(k).
The beneficiary form—filled out in 1998 when Dad started the job—still names his first wife. The woman he divorced in 2003. The one he hasn’t spoken to since the settlement was finalized.
She gets the entire retirement account. $400,000. The kids get nothing from Dad’s largest asset.
Can the family fight it? Maybe. Depending on the asset class and specific circumstances, there may be probate litigation remedies—but “may” is doing a lot of work in that sentence. The litigation is expensive, the outcomes are uncertain, and for ERISA-governed retirement plans like most 401(k)s, federal law heavily favors the named beneficiary. The Supreme Court ruled on exactly this situation in Kennedy v. Plan Administrator (2009). The ex-wife won.
The only way to guarantee this doesn’t happen? Change the beneficiary designation. Everything else is damage control after the fact—and damage control doesn’t always work.
Here’s the rule that catches families off guard: Beneficiary designations override your will. Always. Assets with beneficiary designations—retirement accounts, life insurance, annuities, POD/TOD bank accounts—pass directly to whoever’s named on those forms. They never enter your probate estate. They never pass through your trust (unless your trust is the named beneficiary). The form controls.
Your will can say “everything to my children equally.” Your trust can have beautiful provisions for how assets should be distributed. None of it matters for beneficiary-designated assets if the forms say something different.
Quotable Expert Statement: “I’ve watched families lose hundreds of thousands of dollars to beneficiary designation mistakes. The will said one thing. The form said another. And the form won—it always wins. Most people don’t realize that a casual form they filled out years ago has more legal power than the estate plan they paid good money to create.”
At Boroja, Bernier & Associates, beneficiary designation review isn’t an afterthought—it’s a core part of every estate plan we create. We’ve seen too many families blindsided by forms nobody thought to check. We review what you provide, identify the conflicts, and tell you exactly what needs to change to make your plan work.
We serve Michigan families statewide with consultations available by phone, video, or in person at our Shelby Township headquarters.
Why Beneficiary Designations Trump Everything Else
The Legal Hierarchy Nobody Explained to You
When you open a retirement account or buy life insurance, you sign a beneficiary designation form. That form creates a contract: when you die, the financial institution pays whoever you named. No probate. No court involvement. No executor making decisions. They look at the form, confirm the beneficiary’s identity, and write a check.
This happens automatically—whether or not it matches what your will says.
The hierarchy that actually controls who gets what:
- Beneficiary designations control assets that have them (retirement accounts, life insurance, POD/TOD accounts)
- Trust terms control assets titled in the trust
- Your will controls everything else (your “probate estate”)
- Michigan intestacy laws control if there’s no will and no other designation
Notice the order. Beneficiary designations sit at the top. If your 401(k) form names your ex-wife and your will names your current wife, your ex-wife gets the 401(k). Michigan courts have upheld this principle repeatedly—the contract with the financial institution beats your testamentary documents every time.
Why this matters more than people think:
For most families, beneficiary-designated assets represent the majority of their estate’s value. Add up your retirement accounts, life insurance policies, and any POD/TOD bank or investment accounts. That total might dwarf everything that actually passes through your will.
If those designations are wrong—or outdated—your will and trust become almost meaningless. You’ve planned for the 30% of your estate that goes through probate while ignoring the 70% that doesn’t.
The Assets You Probably Forgot Have Beneficiary Designations
What’s Actually NOT Controlled by Your Will
Most people underestimate how many of their assets pass outside the will. Here’s the full inventory:
Retirement Accounts (Often Your Largest Asset)
401(k) plans, 403(b) plans, traditional and Roth IRAs, SEP-IRAs, SIMPLE IRAs, pension plans, 457 plans, Thrift Savings Plans—every single one passes by beneficiary designation. For many Michigan families, retirement accounts represent more value than everything else combined. If they’re not coordinated with your estate plan, your overall intentions may be completely undermined.
Life Insurance (Including the Policy You Forgot About)
Individual policies, group coverage through your employer, accidental death benefits—all pass directly to named beneficiaries. That group life policy you signed up for during new hire orientation fifteen years ago? It’s still active, still has a beneficiary, and that beneficiary might be someone from a previous chapter of your life.
Annuities
Fixed, variable, immediate, deferred—annuity death benefits pass by beneficiary designation. The rules get complicated depending on whether payments have begun and what type of annuity it is, but the core principle holds: the form controls.
Bank Accounts with POD/TOD Designations
“Payable on death” or “transfer on death” accounts pass directly to whoever you named—no probate, no will, no trust involvement. You maintain full control during your lifetime, but at death, the bank transfers the account per the designation. If you added a POD beneficiary to make things “easier,” that account now bypasses your entire estate plan.
Investment and Brokerage Accounts
Brokerage accounts typically include beneficiary designation options. Same story: whoever’s named gets the account directly, regardless of what your will says.
Health Savings Accounts
Often overlooked entirely. Your HSA has a beneficiary designation. If you named your spouse, they inherit the account and can use it as their own. Anyone else receives a taxable distribution based on the account value at your death.
Real Estate with Enhanced Life Estate Deeds (Lady Bird Deeds)
Michigan allows enhanced life estate deeds that pass real property directly to remainder beneficiaries without probate. Like other beneficiary-designated assets, the deed controls—not your will.
The uncomfortable math:
Take a minute and add up the value of everything on this list that you own. Now compare it to the value of assets that would actually pass through your will or trust.
For most people, beneficiary-designated assets are the majority. Sometimes the vast majority. If you spent time and money on a will or trust but never coordinated beneficiary designations, you planned for the minor portion of your estate and left the major portion to chance.
The Disasters We See Constantly
These Aren’t Hypotheticals—They’re What Happens When Nobody Checks
The Ex-Spouse Problem
Federal law (ERISA) governs most employer-sponsored retirement plans. Under ERISA, the beneficiary designation controls—even after divorce, even if state law would otherwise revoke it. Michigan’s MCL 700.2807 revokes beneficiary designations to former spouses for some assets upon divorce, but it doesn’t apply to ERISA-governed plans like 401(k)s.
Translation: Your divorce decree means nothing to your 401(k) administrator. If you didn’t change the form, your ex likely inherits—and challenging that outcome is expensive litigation with uncertain results.
The Forgotten First Beneficiary
You opened your first IRA at 25. Named your mom as beneficiary because you weren’t married. Now you’re 55, married for twenty years, with three kids. Mom passed away five years ago.
Who gets the IRA?
If you never updated the form: probably your mom’s estate. Or possibly your dad (if your parents were still married when she died). Or possibly nobody knows, which means delays, legal fees, and possibly litigation.
It won’t go to your spouse and kids automatically. The form you filled out at 25 still controls—even though nothing about your life looks the same.
The “I Named My Kids” Problem
You named your three adult children as equal beneficiaries on your 401(k). Sensible, right?
Then one of them dies before you do.
With a will or trust, you could specify that your deceased child’s share goes to their children (your grandchildren). That’s called “per stirpes” distribution. But beneficiary designation forms typically don’t work that way. If your child dies first, their share either goes to the remaining named beneficiaries (your other two kids split everything, grandchildren get nothing) or lapses entirely and ends up in probate.
The form doesn’t know about your grandchildren. It doesn’t care what you’d want. It follows its own rules.
The Minor Child Catastrophe
You named your 8-year-old as beneficiary on your life insurance. You figured it goes to them anyway, so why not make it direct?
Here’s why not: minors can’t legally receive substantial assets. When you die, the insurance company can’t write a check to an 8-year-old. Instead, someone has to petition the court for a conservatorship—court supervision, annual accountings, attorney fees, bonding requirements—all eating into the money you left for your child’s benefit.
The conservatorship continues until your child turns 18. Then they get the entire balance, all at once, no strings attached. An 18-year-old with a large inheritance and zero restrictions. What could go wrong?
The “I Have a Trust But It Doesn’t Control Anything” Problem
You paid an attorney to create a trust. You funded it properly—or thought you did. But your retirement accounts, life insurance, and bank accounts still name individuals as beneficiaries.
Result: your trust controls very little. The assets that would have flowed through the trust—with its protections, management provisions, and distribution rules—instead pass directly to beneficiaries with no protection at all.
The trust document is beautiful. It’s also largely irrelevant.
Naming Your Trust as Beneficiary: When It Makes Sense
Coordination That Actually Works
Here’s a concept most attorneys gloss over: you can name your trust as the beneficiary of retirement accounts, life insurance, and other beneficiary-designated assets. When you die, those assets flow into your trust and are distributed according to trust terms.
Why this matters:
Coordinated distribution. Everything follows the same plan instead of fragments going different directions.
Beneficiary protection. Trust assets can be protected from beneficiaries’ creditors, divorcing spouses, and poor financial decisions. Direct beneficiary designations offer no such protection.
Control over minor beneficiaries. Instead of a court-supervised conservatorship until age 18 followed by an unrestricted lump sum, trust terms control when and how beneficiaries receive funds.
Per stirpes planning. If a beneficiary dies before you, trust terms can direct their share to their children—something most beneficiary designation forms can’t do.
When naming your trust as beneficiary requires careful planning:
Retirement accounts are complicated. The SECURE Act (2019) and SECURE 2.0 Act (2022) changed the rules for inherited retirement accounts. Most non-spouse beneficiaries must now withdraw the entire account within ten years of the original owner’s death. Naming a trust as beneficiary doesn’t change this timeline, and if the trust isn’t properly drafted as a “see-through trust,” the tax consequences can be worse.
At Boroja, Bernier & Associates, we coordinate beneficiary designations with trust planning—ensuring your trust is drafted properly to serve as a retirement account beneficiary if that’s the right strategy, or recommending direct beneficiary designations when that makes more sense.
What to name and how:
If you’re naming a trust as beneficiary, precision matters. The designation should include:
- The exact name of the trust (as it appears in the trust document)
- The date the trust was created
- The trustee’s name
Generic language like “my living trust” creates ambiguity that can delay distributions and invite disputes.
The SECURE Act Changed Everything (And Most Plans Haven’t Caught Up)
Why Your Pre-2020 Beneficiary Strategy May Be Obsolete
Before 2020, non-spouse beneficiaries who inherited retirement accounts could “stretch” distributions over their life expectancy. A 30-year-old inheriting an IRA could take small required distributions for 50+ years, allowing decades of continued tax-deferred growth.
The SECURE Act eliminated the stretch for most beneficiaries. Now, most non-spouse beneficiaries must withdraw the entire inherited account within ten years of the original owner’s death. There’s flexibility in how they get there—they can take it all in year one, wait until year ten, or spread withdrawals across the decade however they choose. But the account must be empty by the end of year ten.
Why this matters for your beneficiary designations:
Tax acceleration. Your beneficiaries have flexibility on timing, but the entire account must be distributed within ten years—which often means significant income tax bills, especially if they’re in their peak earning years. Strategic withdrawal planning can help, but the days of stretching distributions over a lifetime are gone for most beneficiaries.
Trust planning implications. Trusts that were drafted as “conduit trusts” to take advantage of the stretch may now force distributions faster than intended. Trusts drafted as “accumulation trusts” may face compressed taxation at high trust rates. Trust language needs to account for the new rules.
Planning opportunities. Roth conversions, charitable remainder trusts, and other strategies may reduce the tax burden on your beneficiaries. But these strategies require coordinating your beneficiary designations with your overall estate plan—not treating them as separate decisions.
At Boroja, Bernier & Associates, we review beneficiary designations in light of current law—not assumptions from a decade ago. The rules changed. Your plan should too.
The Audit Process: How We Fix This
What Proper Beneficiary Coordination Actually Looks Like
Step 1: Gather your current designations.
Before we meet, pull beneficiary information from every financial institution where you hold assets—retirement accounts, life insurance policies, annuities, bank accounts, brokerage accounts. Request current beneficiary information from each one. You’d be surprised how often clients discover accounts they forgot they had, with beneficiaries they forgot they named. This is your homework—we can’t review what we don’t have.
Step 2: Compare designations to intentions.
For each account: Who’s currently named? Is that who you actually want to receive this asset? Does it coordinate with the rest of your estate plan? What happens if that beneficiary dies before you?
Step 3: Identify the conflicts.
Does your 401(k) name your ex-spouse? Do your bank accounts name one child but not the others? Is your trust supposed to receive assets that currently bypass it entirely? Does naming minors directly create problems?
Step 4: Determine correct designations.
Work with your estate planning attorney to determine who should be named for each account, considering:
- Your overall estate plan structure (will vs. trust)
- Tax implications (especially for large retirement accounts)
- Beneficiary protection needs
- Contingent beneficiaries for every account
- Special circumstances (special needs beneficiaries, beneficiaries with creditor issues)
Step 5: Execute changes correctly.
Complete beneficiary change forms for each account. Use full legal names, Social Security numbers, and correct percentages. If naming a trust, use the exact trust name and creation date. “Trust dated approximately five years ago” isn’t sufficient.
Step 6: Confirm everything.
Submit forms and follow up to verify changes were processed. Request written confirmation. Financial institutions make mistakes—don’t assume your submission was handled correctly.
Step 7: Document and maintain.
Keep copies of all beneficiary designation forms and confirmations with your estate planning documents. Review designations whenever you update your estate plan, after major life events, and at least every three to five years.
Common Questions About Beneficiary Designations in Michigan
No—and this surprises almost everyone. Beneficiary designations override your will, every single time. Assets with beneficiary designations pass directly to named beneficiaries, completely outside probate, regardless of what your will says. If your will leaves everything to your children but your 401(k) names your ex-wife, she gets the retirement account. Your will is irrelevant to that asset.
Partially, but don’t rely on it. Michigan law (MCL 700.2807) revokes beneficiary designations to former spouses for certain assets upon divorce. But this doesn’t apply to ERISA-governed retirement plans—which includes most employer-sponsored 401(k)s and pensions. Federal law preempts state law for those accounts, so your divorce decree means nothing to the plan administrator. The only safe practice is updating every beneficiary designation directly after divorce, regardless of what state law might do automatically.
Not directly—this creates expensive problems. Minor children can’t legally receive substantial assets. If you name a 10-year-old as your life insurance beneficiary, the insurance company can’t pay them. Instead, someone petitions for a court-supervised conservatorship: annual accountings, attorney fees, court oversight. The conservatorship continues until age 18, when your child receives everything in one lump sum with zero restrictions. A much better approach: name a trust as beneficiary, with trust provisions controlling how funds are used for your children’s benefit and when they receive distributions.
It depends on whether you named contingent beneficiaries—and most people don’t. If your primary beneficiary dies and you have no contingent, the asset typically reverts to your probate estate or goes to the deceased beneficiary’s estate. Neither is ideal. Even worse: unlike wills and trusts, most beneficiary designation forms don’t support “per stirpes” distribution. If your child dies before you, their share doesn’t automatically go to your grandchildren. This is a major reason to consider naming your trust as beneficiary instead of individuals.
At Boroja, Bernier & Associates, beneficiary designation review and coordination is included in our estate planning packages—it’s not an add-on or afterthought. Will-based plans range from $1,500 to $2,500; trust-based plans range from $2,500 to $5,500. Both include reviewing all your beneficiary designations and ensuring they coordinate with your overall plan. We don’t charge separately because we don’t believe in estate planning that ignores the forms that actually control most of your assets.
At minimum: every time you update your estate plan, after any major life event (marriage, divorce, birth, death, significant financial change), and every three to five years regardless. In practice, most people set these forms and forget them for decades—which is exactly how families end up with ex-spouses inheriting retirement accounts.
Yes. You can name multiple primary beneficiaries with specified percentages, plus multiple contingent beneficiaries. Just make sure percentages total 100%—and understand that most forms don’t allow per stirpes distribution. If one beneficiary dies before you, their share typically goes to the remaining beneficiaries, not to the deceased beneficiary’s children.
When to Review Your Beneficiary Designations with an Attorney
Some situations make this review urgent:
- You haven’t looked at your beneficiary designations in years. They may name people from a previous chapter of your life.
- You’ve gotten divorced. Michigan law may not protect you for ERISA-governed retirement plans—you need to change the forms yourself.
- You’ve experienced a birth or death in your family. Your intended beneficiaries may have changed.
- You created an estate plan but never coordinated beneficiary designations. Your will or trust may be irrelevant to your largest assets.
- You have a trust but named individuals on beneficiary forms. Your trust provisions aren’t controlling assets that should flow through them.
- You have minor children or grandchildren. Direct beneficiary designations create problems; trust planning solves them.
- You have a beneficiary with special needs. A direct inheritance could disqualify them from government benefits they depend on.
- You’ve heard about the SECURE Act and wonder if your plan is obsolete. Pre-2020 strategies may not work anymore.
At Boroja, Bernier & Associates, beneficiary designation review is standard—not optional. We review what you bring us, compare it to your intentions, identify the conflicts, and tell you exactly how to fix them so your entire estate plan works as one coordinated whole.
Results over effort. We don’t just talk about coordination—we actually do it.
Your Estate Plan Is Only As Good As the Forms Nobody Checked
You can have a perfect will. A comprehensive trust. Powers of attorney that meet every Michigan requirement. And none of it matters if your retirement account still names your ex-wife, your life insurance bypasses your children, and your bank accounts transfer to people you barely remember.
The forms control. The forms always control.
At Boroja, Bernier & Associates, we build estate plans that actually work—not just documents that look good in a binder. We review your beneficiary designations, identify the conflicts, and show you how to coordinate every piece so your intentions actually control what happens to your assets.
That’s what raising the standard means. Not just drafting documents. Making sure every element of your plan works together.
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Monday – Thursday: 9:00 AM – 5:00 PM
Friday: 9:00 AM – 3:00 PM
Saturday & Sunday: By Appointment
Estate planning consultations available statewide—by phone, video, or in person at our Shelby Township headquarters.
