For many families, the largest assets — a 401(k), an IRA, life insurance, a brokerage account — never pass under the will at all. They go to whoever is named on the beneficiary form. A careful will can be undone by a form filled out twenty years ago.
Designations override your will
If your will leaves everything equally to your three children but your life insurance still names only your oldest, the insurance goes to your oldest. The executor has no authority over it. This is the single most common gap we find when reviewing a plan.
What passes by designation
- Life insurance and annuities.
- 401(k)s, 403(b)s, IRAs, pensions and other retirement plans.
- Payable-on-death bank accounts and transfer-on-death brokerage accounts.
- Real estate under a transfer-on-death deed.
- Accounts held jointly with right of survivorship.
What divorce does
Texas law generally cancels a designation of a former spouse on life insurance, retirement accounts and other non-probate transfers when a divorce is finalized, unless the divorce decree or a later designation says otherwise. But there is an important exception: many employer retirement plans are governed by federal law (ERISA), and for those the plan's records can control over the Texas rule. After a divorce, update every form yourself rather than relying on the statute.
When a designation can be challenged
- Capacity
- The owner lacked the mental capacity to make the change.
- Undue influence
- Someone, often a caregiver or new partner, pressured the owner into the change.
- Fraud or forgery
- The form was signed by someone else or obtained by deception.
- Fraud on the community
- A spouse named someone else on a policy or account paid for with community property, in a way unfair to the other spouse.
- Forfeiture
- A beneficiary who willfully causes the owner's death cannot collect.
Challenges move quickly because companies pay claims quickly. If you believe a designation is invalid, notify the insurer or plan administrator in writing right away that the benefits are disputed, and get legal advice.
Getting designations right
- Always name a contingent beneficiary. If the primary has died and no backup is named, the asset often falls into the probate estate.
- Do not name minors outright. A child cannot receive the money directly; a court may need to appoint a guardian. Name a trust or use a Texas Uniform Transfers to Minors Act custodian.
- Be careful with beneficiaries on public benefits. An outright inheritance can cost them SSI or Medicaid. A supplemental needs trust can prevent that.
- Coordinate with the will. Equal shares under the will mean little if the designations are unequal.
- Review after every major life event — marriage, divorce, birth, death — and every few years regardless.
Common questions
Can my will change my beneficiary?
Generally no. Change the designation with the company that holds the account or policy.
Does my spouse have to consent?
For many employer retirement plans, federal law requires a spouse's written consent to name someone else. For community-property assets, naming a non-spouse can also raise fraud-on-the-community issues.
This guide is general information about Texas law as of September 2026, not legal advice for your situation. Laws and dollar figures change, and small facts change outcomes. Reading it does not create an attorney-client relationship. Grover C. Peters III is responsible for this content.