Beneficiary designations trump a will. Tennessee has a statute on it:
If a person… designates… a payee or beneficiary to receive payment of the money, securities, or other property upon death of the person making the designation…, the right of the person or persons so designated to receive payment… shall not be defeated or impaired by any statute or rule of law governing the transfer of property by will or gift or on intestacy.
This rule applies to the following types of plans, systems, or trusts:
- death benefit,
- stock bonus,
- profit-sharing or
- employees’ savings and investment
Notably, life insurance is not covered.
The designation must be made in writing and signed by the person making the designation, and must be agreed to by the employer or be made in accordance with rules prescribed for the plan, system or trust.
In light of this rule, it is imperative that estate planning attorneys and clients:
(1) ensure beneficiary designations are consistent with the overall estate plan (e.g., don’t name a child as beneficiary if the plan is for assets to go into trust for the child’s benefit), and
(2) keep beneficiary designations up to date.
Source: T.C.A. § 35-50-108
Posted by Joel D. Roettger, JD, LLM, EPLS