Will vs. Beneficiary: Which Controls Your NY Accounts?

I recently met with a widower, a retired executive from Manhattan who had spent his career making meticulous plans. He came to my office with a new will, proud he had updated it to divide his entire estate equally between his two adult children. But when I asked about his largest single asset—a brokerage account he’d opened in the 1990s—he paused. He couldn’t recall who he had named as the beneficiary on the original account form.

After a call to the financial institution, we discovered the problem. He had named his late wife as the primary beneficiary. The contingent beneficiary was his nephew, from whom he had been estranged for over a decade. His will said one thing, but the account’s contract said something else entirely. In a contest between the two, the contract almost always wins.

The Will Governs Probate. The Contract Governs Everything Else.

Many assume their Last Will and Testament is the final word on all their assets. It is a logical assumption, but legally, it is incorrect. A will directs the distribution of your probate estate—assets titled in your individual name that do not have a designated beneficiary or a joint owner.

However, many of the most substantial assets a person owns are “non-probate” assets. These include:

• Life insurance policies
• Retirement accounts (IRAs, 401(k)s, 403(b)s)
• Brokerage and investment accounts
• Bank accounts with a “Payable on Death” (POD) or “In Trust For” (ITF) designation

These assets pass to the next owner by operation of law—or more simply, by contract. When you opened that IRA or bought that life insurance policy, you signed a contract with the financial institution. A key term of that contract was the beneficiary designation. That form is a legally binding directive. It instructs the institution where to send the money upon your death, bypassing your will and the entire probate process in Surrogate’s Court.

Your will can state that your son inherits everything, but if your ex-wife is still listed as the beneficiary on your 401(k), she will receive the funds. The will is a powerful document, but it cannot unilaterally break a pre-existing contract you made with a third party.

Outdated Forms: The Unintentional Disinheritance

The greatest source of conflict in my practice comes from this disconnect. Life moves forward, but beneficiary forms often remain frozen in time. A marriage, a divorce, the birth of a child, the death of a parent—these are the moments that should trigger a review of all designated beneficiaries. Most of the time, they don’t.

This oversight creates painful and irreversible outcomes. I have seen children from a first marriage unintentionally disinherited. I have seen estranged relatives receive windfalls. In one of the most common scenarios, a former spouse inherits a significant asset because a form was never updated after the divorce.

New York law does provide some protection. Estates, Powers and Trusts Law (EPTL) § 5-1.4, for example, automatically revokes any bequests made to a former spouse in a will upon a divorce. This is a sensible safeguard. However, this state law does not automatically extend to all non-probate assets. Federally regulated retirement plans, for instance, are governed by federal law (ERISA), which has its own strict rules. Relying on a statute to fix an outdated form is a dangerous gamble.

The only prudent approach is to be deliberate. Stewardship.

Where the Will and Beneficiary Designations Intersect

Is a will completely irrelevant to these accounts? Not always. The will serves as the ultimate backstop. If you fail to name a beneficiary, or if your named beneficiary has already passed away and you did not name a contingent, the financial institution has no one to pay. In that situation, the asset typically defaults to your probate estate.

When that happens, the account funds are paid to the executor of your estate. From there, the asset is distributed according to the instructions in your will. This is the primary scenario where a will’s terms can indirectly control the destination of a non-probate asset—but only because the primary contractual directive failed.

This is not an ideal plan. It forces the asset through the time and expense of probate, which the beneficiary designation was designed to avoid in the first place. The goal is not for your will to catch assets by default, but for your designations to be so clear and current that the will’s role is simply to manage the remaining probate property.

The work of estate planning is not a one-time event. It is an ongoing process of aligning your legal documents with your life’s changes. An outdated beneficiary form can undo even the most carefully drafted will, turning a clear plan into a family dispute.

The first step toward clarity is not to redraft your will, but to gather every beneficiary designation form for your investment, retirement, and insurance accounts. At my firm, we call this a beneficiary audit. Schedule a consultation where we can review these critical documents alongside your will to ensure your legacy is aligned, not in conflict.