People often will believe that their intent as expressed in their estate planning documents will govern all distributions made at their death. This is simply not true. As do-it-yourself estate planning becomes more common due to online forms, it is expected that estate litigation will increase partially because of oversights with beneficiary designations.

One of the largest assets an individual can have is a retirement plan. It is not uncommon for an individual to name one child as the primary beneficiary, intending that this designation is temporary until a Will can be drafted. However, this asset passes as provided on the beneficiary designation form completed when the retirement account was initially set up, regardless of the terms of the Will. This makes it possible for one child to receive the vast majority of the estate, despite a Will that evenly distributes the assets equally to four children. In addition, applicable law requires that for qualified retirement accounts such as 401k plans (and IRAs in some states), the surviving spouse is required to sign a written consent if the account’s primary beneficiary will not be the surviving spouse.

Young couples with small children will often purchase life insurance with the intent of supporting minor children if both parents pass away or if the primary bread-earner passes away. Without any estate planning documents in place, the parents will often name each other as the primary beneficiary and the children as secondary beneficiaries. If both parents passed away, a conservator for the children typically would manage the life insurance proceeds and the money would be distributed outright to the children at age 18. However, most parents prefer that their children receive the proceeds at age 25 or later because of concerns that the assets could be wasted due to the young person’s inexperience or indiscretions. Issues like these are best resolved by careful estate planning done under the direction of experienced legal counsel.


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