One of the most persistent estate planning myths is that having a Last Will and Testament is a complete estate plan. Unfortunately, this is simply not true, and it can leave your beneficiaries confused why you’re wishes you spelled out in your Will “are not being followed” after you pass on.

A Last Will and Testament covers several, limited things when you pass on through the probate court:

The Will names Executors to be in charge of making sure that all of your final affairs are wrapped up, including paying bills, handling taxes, and managing the estate process through the probate court;

It also potentially covers guardian nominations for minor children or disabled adults you may have guardianship over (although our office typically handles this in a separate document); and

The Will also names the beneficiaries and distributions of your probate estate, including age limits on beneficiaries.

Sounds pretty complete, doesn’t it?

It isn’t. The key words in the last item is that a Will handles distributions of your probate estate… not for everything. So if it doesn’t end up in probate, then the Will doesn’t control it. So any assets titled as joint with a right of survivorship or accounts with a “pay on death” beneficiary designation go to people outside your estate, so your Will is meaningless when it comes to those assets. The best way to demonstrate how an estate through a Will can end up a chaotic mess is through an example.

Let’s say John Doe and Jane Doe are married with two kids (ages 2 and 4), and they put together Wills naming each other as their mainThe Disjointed Last Will and Testament beneficiaries and the children are the backup beneficiaries. When stock and bank accounts, 401ks, and $1 million life insurance policies on each are set up, they naturally name each other as primary beneficiaries and the two children as contingent beneficiaries. Suddenly, the Does have a falling out and get divorced despite Jane Doe becoming pregnant with their third child. Divorce ensues. John gets to keep his stock account, 401k, and life insurance, and it’s the same for Jane. They sell the house, each buy smaller houses, and they set up their own bank accounts, but neither names beneficiaries on the bank accounts. When John’s HR department heard he was getting divorced, they changed the beneficiaries on his 401k to be his two children.

A few years later, John Doe creates a new Will naming his three children as his beneficiaries, puts in an age limit of 40, and testamentary trust provisions allow the trustee to use funds for the children until it is completely distributed. A year later, John Doe dies in a car accident. The following happens to his assets:

  • The stock account that still listed his ex-wife as his pay on death beneficiary has a clause that states if a spouse is the beneficiary but they are divorced that the account goes to the contingent beneficiaries without probate, which are John’s first two children and not the third. This happens when each child turns 18.
  • The 401k was switched to name his first two children as pay-on-death beneficiaries, so they will inherit that account outside of probate also at age 18.
  • John’s $1 million of life insurance goes to his ex-wife because he never changed the beneficiary, and there are no divorce provisions in the policy.
  • The bank accounts, house, and personal items go through probate, so they are to be divided among the three children with the relevant age limits.

The end result is John’s ex-wife got the biggest inheritance in the form of a $1 million life insurance payout, two of John’s three kids got the bulk of his investment assets, and the three children named to be his beneficiaries in his Last Will and Testament come in last with just his small house, minimal bank accounts, and personal items.

“That’s not fair! That’s not what his wishes were!”

I hear this all of the time. Unfortunately, because John had a disjointed estate plan using a Last Will and Testament with a hodgepodge of assets containing different beneficiary designations, the wishes he thought were coordinated through his Will are mostly meaningless. Even worse, only two of his three children will end up with large inheritances when they most likely are far too young to handle it. And if you think the likelihood an ex-spouse would remain the beneficiary on a life insurance policy years later, I once had a life insurance agent tell me this happens at least two times a year, leaving the new spouse furious. (There’s a reason insurance agencies try to set up annual meetings; ignore the letters and emails at your estate’ peril.)

To view the video taken from our recent live webinar, check out the video at To learn more about setting up a coordinated estate strategy that also avoids probate, check out the Estate Crash Course at