Do I Need a Will if I’ve Designated Beneficiaries on My Assets?

Yes, you do!

North Carolina law recognizes that having valid beneficiary designations on your assets means that those assets are not subject to probate (aka estate administration). These assets pass directly to those designated beneficiaries. Life insurance policies, stocks, bonds, retirement accounts, and other payable-on-death (POD) or transferable-on-death (TOD) accounts are examples of accounts where you can have beneficiaries designated.

However, having a will in place is important because the will governs how other assets will be distributed. Certain assets do not have beneficiary designations, and these will pass to the individuals that you list in your will. In addition, the will addresses other important information that a beneficiary designation does not, such as who the executor will be, who will serve as a guardian and trustee for minor children, and how any debts you have will be paid.

In addition, other complications may arise with these assets. For example, if you have a primary beneficiary designated and that individual predeceases you, then you no longer have a valid beneficiary designated. You can avoid this by having a contingent beneficiary listed or by using the heirs under your will to control who inherits that asset. Other issues can arise, which can lead to disputes as to who the beneficiary is. It is crucial to regularly review and update your beneficiary designations to ensure they align with your wishes, but just in case an asset is missed, you can have your will be the backup plan.

In summary, while beneficiary designations can simplify the transfer of certain assets and avoid probate, having a will provides a comprehensive plan for the distribution of your estate and addresses potential gaps or issues that may arise with non-probate assets.