Jerry Taylor explains how beneficiary designations work: a man's handwritten will specified how to split his estate, but most of his money was in an IRA with named beneficiaries. The IRA beneficiaries got the funds and didn't have to follow the will.
A client recently told me this story. Their father had an IRA and he had designated beneficiaries on the IRA. Then about a month before he died, this same gentleman wrote a handwritten will, and according to the state law, it was a valid will. And within that will, he made very specific designations about how he wanted to split up his money, you know, 20% to this person, 20% to that person, 5% to this niece, 5% to this grandchild. But the bulk of his estate, primarily all of it, was in his IRA. When you have put beneficiaries on an account or a policy, you know, retirement policy, um, life insurance, whenever you have named beneficiaries, those designations will win out every time over a will. So it does not matter what he put into his will one month before he died that was witnessed by two people and notarized and very, very specific. It does not matter because the bulk of his estate, primarily all of it, was in his IRA. That he had named designated beneficiaries for. And so those people rightfully got the money under those beneficiary designations, and they have no duty whatsoever to carry out his wishes as he stated in his will.
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