One of the most common questions we hear at Frame & Frame Attorneys at Law is: “Do I need a will if I already have named beneficiaries on my accounts?”
On the surface, it might seem like naming beneficiaries on your bank accounts, retirement plans, and insurance policies is enough to ensure your assets go where you want them to. However, relying solely on beneficiary designations can leave major gaps in your estate plan, especially here in Maryland.
In this comprehensive guide, we’ll explore the difference between beneficiary designations and wills, explain the risks of not having a will, and help you understand why having both is critical for a complete estate plan.
What Is a Beneficiary Designation?
A beneficiary is the person or entity you name to receive a particular asset after your death. Beneficiary designations are commonly used on:
- Life insurance policies
- Retirement accounts (401(k), IRA)
- Bank accounts (via payable-on-death or transfer-on-death instructions)
- Investment accounts
- Some annuities and pensions
When you pass away, these assets typically transfer directly to your designated beneficiary without going through probate. This can be a fast and efficient way to pass along certain assets.
What Is a Will?
A last will and testament is a legal document that outlines your wishes for how your assets should be distributed after your death. It also allows you to:
- Name a guardian for minor children
- Appoint a personal representative (executor)
- Specify how debts and taxes should be paid
- Provide for personal property or real estate not covered by beneficiary designations
- Leave instructions for digital assets or sentimental items
A will becomes effective only upon your death and must go through probate in Maryland—a legal process where the court validates the will and supervises the distribution of your estate.
So, Do You Need a Will If You Already Have Beneficiaries?
Yes. Even if you’ve named beneficiaries on all your financial accounts, having a will is still essential to a complete estate plan in Maryland. Here’s why:
1. Beneficiary Designations Only Cover Certain Assets
Not all your assets allow you to name a beneficiary. Examples of property that generally require a will include:
- Real estate (unless titled jointly with survivorship or in a trust)
- Vehicles
- Personal property (jewelry, furniture, collectibles)
- Business interests
- Digital assets
- Residual assets that are not otherwise transferred
If you pass away without a will and you own these types of assets, Maryland intestacy laws determine who gets what—which may not align with your intentions.
2. A Will Appoints a Guardian for Minor Children
If you have children under the age of 18, you must name a guardian in your will. Without a will, the court will appoint someone based on state law, and it may not be the person you would have chosen. This is one of the most important reasons to have a will—your children’s care and future depend on it.
3. A Will Names an Executor to Manage Your Estate
Even with beneficiary designations in place, someone must:
- Pay your final bills and taxes
- Distribute personal property
- Close accounts
- Manage or sell real estate
- Handle legal issues
A will allows you to designate an executor (called a “personal representative” in Maryland) to handle these tasks. Without a named executor, the court appoints someone, and that person may not be who you trust to carry out your wishes.
4. Beneficiary Designations Can Conflict with Your Estate Plan
If your will and your beneficiary designations don’t match, it can cause confusion, delays, or legal disputes. For example:
- Your will leaves your estate equally to your three children, but your retirement account lists only one child as the beneficiary.
- Your will divides your assets between your current spouse and a child from a previous marriage, but your life insurance policy names only your former spouse.
Beneficiary designations override what’s in your will. If you fail to coordinate the two, it could result in unintended consequences and family conflict.
5. A Will Covers the “What If” Scenarios
Beneficiary designations don’t address:
- What happens if your named beneficiary dies before you?
- What if your beneficiary is a minor or disabled?
- What if you want to distribute your assets in stages or under certain conditions?
A will (or a trust) gives you the flexibility to plan for contingencies, add protections for vulnerable beneficiaries, and clearly outline your intent.
6. Maryland Probate and Intestacy Laws Can Take Over Without a Will
If you die without a will in Maryland (called dying intestate), the state decides how your estate is distributed, regardless of your wishes. Here’s how it typically works:
- If you’re married with children, your spouse may not inherit everything.
- If you’re unmarried and have no children, your parents or siblings may inherit.
- If you have no living relatives, your estate could eventually escheat to the state.
This process can be lengthy, expensive, and stressful for your loved ones, and easily avoided with a simple will.
7. A Will Complements Other Estate Planning Documents
Beneficiary designations are one part of a complete plan. You also need:
- A revocable living trust for managing and distributing assets outside of probate
- A durable financial power of attorney to authorize someone to manage finances if you become incapacitated
- An advance healthcare directive or living will to guide medical decisions
- A HIPAA release to allow family access to health information
- A personal property memorandum to distribute sentimental or specific belongings
A will works alongside these documents to create a comprehensive, legally sound estate plan tailored to your family and your goals.
What Happens If You Only Have Beneficiaries and No Will?
Let’s walk through a hypothetical Maryland scenario:
You have a life insurance policy, 401(k), and bank account, all with named beneficiaries. But you also own a home, have a car, a dog, and some family heirlooms. When you die:
- Your life insurance, 401(k), and bank funds go directly to your named beneficiaries.
- Your home, car, and personal property go through probate.
- The court determines who inherits your home and possessions based on intestacy law.
- No guardian is appointed for your pet, and your wishes regarding its care may not be honored.
This scenario underscores that beneficiary designations are not a substitute for a will.
How to Ensure Your Will and Beneficiaries Work Together
To avoid unintended consequences, follow these best practices:
- Review All Accounts Regularly – Ensure your beneficiary designations are accurate and reflect your current relationships and intentions.
- Coordinate With Your Estate Plan – Align your will, trust, and beneficiaries to create a unified strategy.
- Consider Contingent Beneficiaries – Always name backup beneficiaries in case your primary choice passes before you.
- Avoid Naming Minors Directly – Instead, consider a trust or custodial account.
- Update After Major Life Events – Marriage, divorce, births, and deaths should trigger an estate plan review.
At Frame & Frame, we conduct thorough reviews to help you avoid gaps, contradictions, or costly mistakes in your estate plan.
Final Thoughts: Yes, You Still Need a Will
Having beneficiary designations is a good start, but it’s not enough. Without a valid will, you risk leaving your family with unanswered questions, avoidable legal complications, and unintended outcomes.
A well-drafted will ensures that everything else you own, love, or are responsible for is protected: your home, your children, your pets, your memories. Contact Frame & Frame Attorneys at Law today to schedule a consultation and create a comprehensive estate plan that works hand-in-hand with your beneficiary designations.