How Often Should I Update Beneficiary Designations on My Accounts?

 Posted on May 06, 2026 in Estate Planning

Many people set up a beneficiary on a bank account or life insurance policy and rarely think about it again. While beneficiary designations do not require constant attention, life can still change. It’s wise to regularly check that your designations are still in line with your wishes. Improper designations can cause serious problems for your loved ones after you’re gone.

If you're not sure whether your designations are due for a review in 2026, a Kane County estate planning lawyer can help.

What Happens if You Never Update Your Beneficiary Designations?

Beneficiary designations on accounts like life insurance policies, IRAs, 401(k)s, and payable-on-death bank accounts pass directly to whoever is named, regardless of what your will says. This holds even if the person designated isn’t the one you would ultimately have chosen. A beneficiary designation can override your will entirely regarding the assets you’ve designated.

That means, for example, that if your ex-spouse is still listed as the beneficiary on your life insurance policy, they may receive that money even if you've since remarried and your will leaves everything to your current spouse. Though it may seem obvious that the deceased wanted their assets to go to the person in their will, Illinois courts have consistently upheld beneficiary designations over conflicting will provisions in cases like these.

When Should You Review and Update Your Beneficiary Designations in Illinois?

A good rule of thumb is to review your beneficiary designations any time something significant changes in your life. A set schedule, such as every five years, may sound reasonable, but it can mean missing an important update in the meantime.

Some life events that should trigger a designation review are: 

• Marriage or remarriage
• Divorce or legal separation
• The birth or adoption of a child or grandchild
• The death of a named beneficiary
• A significant change in your financial situation
• The diagnosis of a serious illness in you or a named beneficiary
• A beneficiary becoming incapacitated or developing special needs

Pay particular attention if the beneficiary develops special needs. If you name someone with a disability as a direct beneficiary, an inheritance could disqualify them from means-tested government benefits like Medicaid or Supplemental Security Income. This may be important long-term income for them. In these cases, a special needs trust may be a better solution, and an estate planning attorney can help you set one up properly.

Remember Contingent Beneficiaries

Many people name a primary beneficiary but skip the contingent beneficiary. This is the person who receives the asset if the primary beneficiary dies before you do. If your primary beneficiary passes away and there's no contingent named, the account may go through probate, a court-supervised process that can be slow, expensive, and public. Naming a contingent beneficiary now is a simple step that can prevent a lot of headaches.

How Are Beneficiary Designations Covered By Illinois Law?

Illinois doesn't have one statute that governs all beneficiary designations. The rules vary depending on the type of account. For example, retirement accounts like IRAs and 401(k)s are governed in part by federal law under the Employee Retirement Income Security Act (ERISA). Life insurance policies are regulated under 215 ILCS 5/238.

Unlike some states, Illinois does not always automatically revoke a beneficiary designation in favor of an ex-spouse after divorce for all account types. For certain accounts, the former spouse may still be entitled to the funds unless you actively update the designation. Don't assume that a divorce decree takes care of it. If you’ve divorced, review your accounts with an estate planning lawyer.

Call a Geneva, IL Estate Planning Lawyer Today

Keeping your beneficiary designations current is one of the simplest things you can do to protect your loved ones from legal headaches. Our Kane County estate planning attorney handles every case personally. You'll always work directly with a single attorney who knows your situation.

We offer free consultations. Call Loire Krajniak Law, LLC at 630-448-2406 to schedule yours today.