Common Pitfall of Estate Planning: Updating Beneficiaries Is Crucial for LGBTQ+ Couples

Many people spend time and money creating a will or trust but never update the documents that actually determine who receives some of their most valuable assets.

For LGBTQ+ couples, this oversight can be especially costly.

I've seen situations where an ex-partner, former spouse, parent, or other relative remained listed as a beneficiary simply because no one remembered to update the paperwork. Unfortunately, beneficiary designations often control regardless of what your will or trust says.

Your Will Doesn't Control Everything

Many assets pass outside of probate directly to the person named on a beneficiary designation.

These commonly include:

• Life insurance policies

• 401(k) plans

• Traditional IRAs

• Roth IRAs

• Pension benefits

• Brokerage and investment accounts with Transfer-on-Death (TOD) or Payable-on-Death (POD) designations

• Annuities

If your beneficiary designation names your former partner from ten years ago, that person may inherit the asset—even if your will leaves everything to your spouse.

Marriage Doesn't Automatically Fix It

Many couples assume that getting married automatically changes beneficiary designations.

It doesn't.

If you never update your retirement account, life insurance policy, or investment account, the institution will generally distribute the funds according to the beneficiary designation on file.

That can create heartbreaking situations where:

• An ex-spouse receives life insurance proceeds.

• An ex-partner inherits a retirement account.

• A parent receives assets instead of a surviving spouse.

• Children from a prior relationship unintentionally inherit assets that were intended for your current spouse.

• A current spouse and children are forced into expensive litigation over conflicting estate planning documents.

These disputes are often preventable.

Don't Forget Your Health Care Documents

Updating beneficiaries is only part of the equation.

Ask yourself:

If I became incapacitated today, who could make decisions for me?

Your Health Care Proxy and Durable Power of Attorney deserve the same attention.

I've seen people whose former partner remained named as their health care agent or financial agent years after the relationship ended. Others never updated these documents after getting married.

If your wishes have changed, your documents should change too.

Life Changes Should Trigger an Estate Plan Review

Review your beneficiary designations and estate planning documents whenever you experience a major life event, including:

• Marriage

• Divorce

• The end of a long-term relationship

• The beginning of a new relationship

• The birth or adoption of a child

• The death of a beneficiary

• A significant change in your financial situation

A simple review can prevent years of confusion and conflict.

Estate Planning Is More Than Signing Documents

Estate planning isn't something you do once and forget.

It's an ongoing process that should evolve as your life evolves.

For LGBTQ+ individuals and couples, that's especially important. Many families include blended relationships, chosen family, children from prior relationships, or assets accumulated before marriage. A beneficiary designation that made perfect sense five years ago may no longer reflect your wishes today.

One of the simplest—and most valuable—things you can do is spend an hour reviewing every beneficiary designation and decision-maker you've named.

Your loved ones will be grateful you did.