Beneficiary designations and account registrations quietly control the largest share of many estates — and they override the will. Assignments move title to assets without a formal registration system (business interests, tangible personalty) into a trust. Keeping these coordinated with the dispositive plan is core funding work.
- POD (payable-on-death) applies to bank accounts; TOD (transfer-on-death) applies to securities accounts and, in adopting states, vehicles and real property.
- Retirement accounts (IRAs, 401(k)s) and life insurance/annuities pass by contract to the named beneficiary — plan primary and contingent beneficiaries and analyze trust-as-beneficiary under SECURE.
- ERISA plans generally require spousal consent to name a non-spouse beneficiary; a designation can trump a divorce decree absent a proper change (see Kennedy v. Plan Administrator).
Silent plan-defeaters
Stale designations (an ex-spouse, a predeceased or now-adult beneficiary, no contingent) routinely override an otherwise perfect plan. Some states revoke designations to a former spouse on divorce, but ERISA preemption can defeat that — always re-execute after a divorce.
- Use a general assignment to move tangible personal property (furniture, art, collectibles) into a revocable trust.
- Assign LLC/partnership interests by a written assignment plus any required member/partner consent and an operating-agreement amendment; confirm transfer restrictions.
- For S-corporation stock, assign only to an eligible trust (grantor, QSST, or ESBT) and make timely elections to preserve the S election.
- Document assignments and keep a current schedule of trust assets.
Key takeaways
- Designations and registrations override the will and control much of the estate — audit and coordinate them deliberately.
- Re-execute designations after divorce; ERISA preemption can defeat automatic-revocation statutes.
- Assign business interests and personalty into the trust with proper consents; watch S-corporation eligibility.
Authorities
- Kennedy v. Plan Adm'r for DuPont Sav. & Investment Plan, 555 U.S. 285 (2009)
- Egelhoff v. Egelhoff, 532 U.S. 141 (2001) (ERISA preemption of revocation-on-divorce)
- IRC 1361 (S-corporation eligible trusts)