What it is: a person or organization designated to receive money, property, or other assets — from a will, trust, life insurance policy, retirement account, or another estate planning document.
Why it matters: beneficiaries receive what the document says they receive. Keep beneficiary designations current (marriage, divorce, birth, death all affect them) — a long-forgotten beneficiary can override your will, because accounts with named beneficiaries flow outside the will.
Where beneficiaries appear: life insurance, 401(k)/IRA, payable-on-death bank accounts, and transfer-on-death brokerage accounts all pass by beneficiary designation — not by your will.
Watch out for: an ex-spouse still listed as beneficiary is one of the most common, painful mistakes. Update designations after divorce; in Illinois, a divorce can revoke a former spouse’s beneficiary status by law in some accounts, but don’t rely on that — change it yourself.