Your Will Says One Thing, Your 401(k) Another — Which Wins? (California)

Short answer: The beneficiary designation wins. Your life insurance policy, 401(k), IRA, and any pay-on-death or transfer-on-death account pass directly to whoever is named on the form — your will does not control them (Prob. Code § 5000). If your will leaves everything to your current spouse but your 401(k) still names your ex, the ex gets the 401(k). Full stop.

Figures and code sections verified against the California Probate Code and U.S. Supreme Court reporters, 2026. This is general information, not legal advice for your situation.

Why the form beats the will

People assume the will is the master document — the thing that decides who gets what. For a lot of your assets, it isn’t. A will only controls “probate” assets: things titled in your name alone with no beneficiary attached, like a car or a checking account with nobody named on it.

Certain accounts skip the will entirely because they carry their own instructions. These are called non-probate assets, and the beneficiary form is the instruction:

• Life insurance
• 401(k), 403(b), and other employer retirement plans
• Traditional and Roth IRAs
• Annuities
• Pay-on-death (POD) bank accounts and transfer-on-death (TOD) brokerage accounts

When you die, the insurance company or plan administrator doesn’t read your will. They pull the form you signed, see the name on it, and cut the check to that person. Prob. Code § 5000 says these transfers are valid and pass outside probate — your will can say the opposite and it changes nothing.

The classic disaster: the ex-spouse who’s still on the form

Here’s the one that burns people. Say a Camarillo dad divorces, remarries, and dies fifteen years later. His will leaves everything to his second wife. But his 401(k) at work — worth, say, $400,000 — still names his first wife, because he never changed the form. Who gets the $400,000?

The first wife. And this is where California and federal law split in a way that surprises almost everyone.

California has a law (Prob. Code § 5040) that automatically cancels an ex-spouse’s beneficiary designation when you divorce. Sounds like it saves the day. It doesn’t — not for most 401(k)s. Most employer retirement plans are governed by a federal law called ERISA, and federal law overrides (preempts) the California auto-revocation rule. The U.S. Supreme Court settled this twice: in Egelhoff v. Egelhoff (2001) 532 U.S. 141, it struck down a nearly identical state auto-revocation statute for ERISA plans, and in Kennedy v. Plan Administrator for DuPont (2009) 555 U.S. 285, it held the plan administrator must pay whoever is named on the plan document — even a divorced ex who had signed away her rights elsewhere.

Translation: for a 401(k), don’t count on the state divorce rule to fix a stale form. Change the form yourself. IRAs and life insurance you buy privately aren’t ERISA plans, so § 5040 can apply to them — but “can” isn’t “will,” and fights over it cost money. The clean answer is the same for everything: update the beneficiary.

When it makes sense to name your trust instead of a person

Sometimes the right beneficiary isn’t a person at all — it’s your trust. Naming your living trust as the beneficiary makes sense when your beneficiary is a minor (a child can’t legally receive a large payout directly), has special needs and can’t hold assets without losing government benefits, or is someone you don’t want handed a lump sum at 19. The trust catches the money and doles it out on your terms.

Retirement accounts are the tricky exception. Naming a trust as the beneficiary of an IRA or 401(k) has real tax consequences under the SECURE Act’s payout rules, and doing it wrong can accelerate the income tax. This is worth a conversation before you name your trust on a retirement form — some assets belong in the trust, some are better left to a person directly. If you want a straight read on which is which, that’s the kind of thing worth naming a trust as beneficiary gets into, and it pairs with how you handle beneficiary and retirement planning overall.

Common questions

Does my will override my life insurance beneficiary?

No. Your life insurance pays whoever is named on the policy’s beneficiary form, not whoever your will names. Under Prob. Code § 5000 the policy passes outside probate, so the will never touches it. If you want a different person to get the death benefit, change the beneficiary form with the insurer.

My 401(k) still names my ex — will they really get it?

Very likely yes, if you don’t fix it. Most 401(k)s are ERISA plans, and under Egelhoff and Kennedy the plan pays the named beneficiary and federal law overrides California’s automatic divorce-revocation rule. Don’t rely on the divorce to clean it up — log in and change the beneficiary yourself.

What happens if I never named a beneficiary at all?

Then the account follows the plan’s or policy’s default rule, which is usually your estate — and that means it goes through your will and possibly probate, the exact thing beneficiary designations exist to avoid. Naming a live beneficiary (and a backup) is faster and cheaper for your family than letting it default.

Do I need a lawyer to change a beneficiary?

No — most changes are a free online form with your plan or insurer, and you should just do them. A lawyer matters when the choice is complicated: naming a trust, a minor, or a special-needs beneficiary, or coordinating a retirement account with the SECURE Act rules. That’s when a wrong form creates a tax or benefits problem.

Should the same person be my will beneficiary and my account beneficiary?

Not necessarily, but they should be intentional. The danger is a mismatch you forgot about — a will updated after a divorce or new marriage while the old beneficiary forms sit untouched. Audit both together so they say what you actually want.

The bottom line

Your will is not your whole estate plan, and for your biggest accounts it may control almost nothing. Life insurance, retirement accounts, and POD/TOD accounts pass by the beneficiary form, and for most 401(k)s federal law makes that form nearly untouchable — a stale ex-spouse designation can hand hundreds of thousands of dollars to the wrong person no matter what your will says. The fix costs nothing and takes an afternoon: pull every beneficiary form, name the person or trust you actually want, name a backup, and redo it every time your family changes. If you’re not sure whether an account should name your trust or a person, or you’re staring at a retirement account and worried about the tax, talk to Eric — he’ll tell you straight, and if it’s really a job for your CPA he’ll say so.

Sources: Cal. Prob. Code § 5000 (nonprobate transfers valid, pass outside the will); Cal. Prob. Code § 5040 (revocation of spousal designation on dissolution); Egelhoff v. Egelhoff (2001) 532 U.S. 141 (ERISA preempts state automatic-revocation statutes); Kennedy v. Plan Administrator for DuPont Sav. & Investment Plan (2009) 555 U.S. 285 (plan administrator pays named beneficiary per plan documents).