Accounts that allow the owner to designate a beneficiary as a matter of contract avoid probate with respect to that asset when that beneficiary survives the death of the account owner. Properties for which the owner can designate a beneficiary include life insurance policies, Individual Retirement Accounts (IRAs), annuities retirement plans and transfer-on-death accounts. The beneficiary in these cases need not be named in the decedent’s will, but only in the contract or policy. If a living beneficiary has not been designated, then the decedent’s estate is typically the beneficiary, and the property in question becomes part of the decedent’s probate estate. It is extremely important that owners of these properties, and their financial advisors, periodically review beneficiary designations to ensure that the person or persons the owner intends to be the beneficiary(ies) is actually the designated beneficiary.
