Beneficiary Designations: 5 Critical Mistakes to Avoid

Many people might not realize that their will does not control who inherits all of their assets when they die. Many assets pass by beneficiary designation -- which is the ability to fill out a form with the financial company holding the asset and name who will inherit the asset upon your death.

Assets such as life insurance, annuities and retirement accounts (401(k)s, IRAs, 403bs and similar accounts) all pass by beneficiary designation. In addition, many financial companies allow you to name beneficiaries on non-retirement accounts, which are known as or POD (pay on death) accounts.