Can A Spouse Override A Beneficiary?

Posted Jan 19, 2024


Estate planning can be complex, partly because the process can be rife with misunderstandings and assumptions. Such issues can range from what exactly is tax exempt to who exactly receives disbursements or assets. 

This can be especially tricky when spousal rights come into play. The assumption is that a spouse always inherits assets at death. But this isn’t always true. Even if your spouse is the presumed heir, they might not inherit unless your assets are jointly owned or carry a “rights-of-survivorship” designation. 

The situation can be as murky if you name a beneficiary to receive an asset, life insurance policy, qualified benefit plan, or bank account. Getting back to assumptions, it’s expected that spousal rights could override those of the beneficiary. Technically, this is true. As the account holder, you can choose anyone you want to receive proceeds or assets, and your spouse might have a legal leg on which to stand. 

But there are some exceptions to this assumption.

On the other hand, if you live in a community property state, or your spouse can prove that you were coerced or unduly influenced, that asset could end up in your spouse’s possession, even if you designated someone else as the official beneficiary. 

Defining the Beneficiary: A Review

A beneficiary is the individual or entity who receives distributions from a trust, will, or life insurance policy. In legal language, the beneficiary is a specifically identified entity that receives something left to them by someone else. The operative words are “specially identified.” In other words, you need to specifically identify who—or what—receives distributions if you die or are incapacitated. 

You could name your spouse or children as beneficiaries of your life insurance policy, retirement fund, or other assets. But this isn’t a requirement. Non-family members can be designated beneficiaries. So can non-person entities like charities, nonprofits, or trusts. 

The general rule of thumb is that a beneficiary could override a spouse regarding asset receipt. But that’s not always the case. 

Spousal Rights – or Not?

Even if you want to leave your retirement fund or life insurance policy to a non-spouse beneficiary, the following situations could make that plan moot.

Where you live

If you and your spouse live in a community property state, your retirement account, life insurance policy, or real estate asset might be considered community property. In other words, it is jointly owned by you and your spouse. So, when you die, half of the proceeds could end with your spouse, even with a designated beneficiary.

As of this writing, community property states are:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

What about non-community property states? Depending on state law, your spouse could be entitled to receive proceeds from your pension or life insurance policy when you die, even if an assigned beneficiary is involved.

Type of asset

You could leave a life insurance policy or real estate asset to a non-spousal beneficiary without worry—as long as your wishes are clearly delineated. However, the situation is different when it comes to qualified pension plans. A qualified pension plan is an employer-sponsored plan that meets the Internal Revenue Code and Employee Retirement Income Security Act (ERISA) requirements. These include 401(k) or 403(b) plans, employee stock ownership plans (ESOPs), or Simplified Employee Pension (SEP) plans. 

Under ERISA rules, the qualified pension plan automatically goes to your spouse even if you name another beneficiary. The only exception is if your spouse signs a waiver agreeing to your choice of another beneficiary.

Clarify Your Wishes

When you die, much of who inherits what depends on the assets involved, state law, and other factors. Because of this, the question of whether a spouse can override a beneficiary goes beyond a yes or no answer. 

Because of the complexity of inheritance law and requirements, working with a professional well-versed in estate planning issues in your state of residence is essential.


This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice, meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.

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