Definition
The person or entity named to receive an account or insurance payout when you die. Beneficiary designations on retirement accounts and life insurance override your will, so audit them after every major life event.
Why it matters
Beneficiary forms outrank wills, and outdated ones are a legal classic: the ex-spouse who inherits a 401(k) because a form was never updated. Five minutes of auditing prevents a courtroom.
Example
After a divorce and remarriage, a saver updates the beneficiary on their 401(k), IRA, and term life policy. Had they only updated the will, the old designations would still have controlled where the money went.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.