When There’s a Will, There Might Not Be a Way

A client came to see me about his retirement plan. Bill had done well and was ready to enjoy some of the benefits he’d been saving for all his life. Bill had divorced his first wife a decade earlier, and moved on to a new partner.

“Bill, there’s something a lot of people overlook. Have you changed the beneficiary designation on your plan?”

Bill smiled confidently. “I’m not too worried about that. My will is up-to-date and I’ve got everything split up between Brenda and my kids.”

I shook my head. “Here’s something most people don’t know. Did you ever fill out a new beneficiary form? If you didn’t, forget what your will says. The beneficiary form trumps your will.”

“But my estate attorney didn’t say anything about my any of this. Wouldn’t…?”

I raised a cautionary eyebrow. Actually, no. William DuPont of the famous family willed his retirement account to be split between his new spouse and his kids, but he never changed his beneficiary form. It ultimately ended up in the Supreme Court and guess who got the benefits?

“I had no idea. You mean if I were to die and…?”

“Yes, but you’re in good hands. This is what we do here at Madison Pension. It’s easy enough to take care of as long as you understand how death benefits in retirement plans live outside of your will.

Bill took a deep breath. “Thank you! You just saved my family a huge disappointment.”

“Isn’t that what professionals do?”