If your goal is to help keep lawyers employed (and that’s an excellent thing to do in my opinion), then do not change your beneficiary forms on your retirement accounts when you do your estate planning.

By retirement accounts, I mean things like 401(k), 403(b), Pension, and IRA type accounts to name a few. These types of accounts are not able to be held in a Revocable Trust, instead they pass by beneficiary designation.  But all too often, people will go through the work and expense of preparing an estate plan using a Revocable Trust, but then neglect to check the beneficiary forms on their retirement accounts.

The beneficiary designation on a retirement account governs regardless of anything stated in a Trust or Will.  Your Trust or Will could leave everything to your children equally, but if your beneficiary designation names only one child, then that one child takes the entire retirement account.

If that is your intent, to leave a particular account to a single child, then fine.  But neglecting to plan how retirement assets will pass, means full employment for lawyers.  Fine with us lawyers…not so great for the children left behind to litigate the mess.

Worse yet, if your retirement account has no beneficiary named, or the named beneficiary dies before you do, then oftentimes the retirement assets will pass to your Probate Estate, which means they must pass through the Court process of probate before being distributed to your heirs. 

The bottom line is that failing to plan for the distribution of your retirement accounts often means you are planning on litigation in your estate.