You can have a beautifully drafted will. You can have a recent estate plan. You can have specific instructions about who gets what. None of it touches the money in your registered accounts or your life insurance policy if the beneficiary form on file says someone else.
The form wins. Always. And it's usually filled out once — when you opened the account a decade ago — and never updated.
What designations override the will
- RRSPs, RRIFs, TFSAs (Canada)
- 401(k), IRA, Roth IRA, HSA (United States)
- Life insurance policies (any country)
- Annuities
- Pension survivor benefits
- Some employer-sponsored stock plans
Anything held in a joint account with right of survivorship also bypasses the will and goes directly to the surviving owner.
The five most common pitfalls
1. Ex-spouse still named
After divorce, most people update the will and forget the beneficiary forms. In some jurisdictions divorce automatically revokes spousal beneficiary designations; in many it does not. Even where it does, the rule is for certain plan types only — life insurance might be excluded. The result: the ex inherits 401(k)s, life insurance, or RRSPs years later, while the current spouse and kids get nothing from those accounts.
Fix: within 30 days of any major life event (marriage, divorce, kids, remarriage, death of a beneficiary), open every account and update the form.
2. No contingent beneficiary
If your primary beneficiary dies before you and you didn't name a contingent, the asset usually falls into your estate — meaning probate, delays, fees, and the will's default disposition. Contingents are free; not naming one is just sloppy.
Fix: always name a contingent. “Spouse if living, otherwise children equally per stirpes” covers most cases.
3. Naming a minor child outright
A minor can't legally receive a six-figure transfer. The funds get sent to a court-appointed guardian, possibly different from the person you'd choose, and the minor receives the entire balance at age of majority — 18 or 19, depending on jurisdiction. A 19-year-old with $400,000 is a prediction, not a question.
Fix: name a testamentary trust (drafted in your will) as the beneficiary, or use a UTMA / RESP / formal trust set up specifically for the kids. Talk to an estate lawyer for the right structure in your situation.
4. Naming “my estate” on registered accounts (Canada-specific issue)
In Canada, naming your estate as beneficiary of an RRSP or TFSA pulls the full account value into the deceased's final tax return at marginal rates, and into the estate for probate fees. Naming a spouse instead allows a rollover to the spouse's registered account with no immediate tax. The cost of getting this wrong on a $300,000 RRSP can be $100,000+ in unnecessary tax.
Fix: name a spouse as primary, dependent children as contingent (or as primary if no spouse). Only name the estate as a deliberate choice with tax advice.
5. Ambiguous charitable beneficiaries
“The cancer charity I always donate to” isn't enforceable. Charities rebrand, merge, dissolve. Always name the legal entity exactly (registered charitable name, charity registration number) and check it once a year.
The 60-minute audit
Block one hour, make a list of every account, log into each provider, screenshot the current beneficiary, update if needed. Most providers let you do this online without paperwork.
- RRSPs, TFSAs, RRIFs, RESPs (Canadian providers)
- 401(k), IRAs, HSAs (US providers — check both employer and rollover accounts)
- Every life insurance policy you have (term, whole, group through work)
- Pension survivor election (employer HR portal)
- Joint account ownership type (right of survivorship vs. tenants in common)
- Annuity contracts
One special case: the “unfunded” will
Many wills are written assuming the will gets all the money, and then forget that registered accounts and insurance bypass it. So the will says “split equally among my three kids,” but the only assets that flow through it are the house and a chequing account. The retirement accounts (worth far more) all went to a single named beneficiary. The other kids may have legal recourse against that beneficiary, but it's a fight, and in many places the named beneficiary wins anyway.
Make sure your beneficiary designations and your will are consistent in intent. The cleanest pattern: name the spouse on registered accounts and let the will handle the residuary estate for the kids.
Bottom line
Beneficiary forms are the highest-leverage hour of estate planning. An afternoon's work prevents tens of thousands of dollars in tax, weeks of probate delay, and the most common kind of family-tearing inheritance dispute.