Money That Skips the Will: $14.6 Trillion in IRAs Goes Wherever the Beneficiary Form Says

Disclaimer: General educational research only — not legal, tax or financial advice. Figures are estimates with the limits explained in the methodology. Verify with official sources and a qualified professional before making decisions.

Estate Planning Data & Research → Money That Skips the Will: $14.6 Trillion in IRAs Goes Wherever the Beneficiary Form Says

Many people assume their will covers everything they own. It doesn’t. Retirement accounts, life insurance and accounts marked “payable on death” or “transfer on death” go to whoever is named on the account’s beneficiary form. The will has no say. If the form is out of date, the money can go to an ex-spouse, a parent who has since died, or your estate, which is often the worst choice.

IRS data shows how much money that involves. At the end of 2023, 71 million taxpayers held IRAs worth $14.58 trillion. And that’s before counting 401(k)s, pensions and life insurance.

We pulled IRS figures for every state and checked the federal and state rules that decide where this money goes.

Your will and your beneficiary forms should tell the same story. See whether you need a will, a living trust or both.

Key findings

• 71,058,598 taxpayers held at least one IRA at the end of 2023, worth $14.58 trillion in total. Traditional IRAs held $12.10 trillion, Roth IRAs $1.68 trillion, SEP IRAs $0.61 trillion and SIMPLE IRAs $0.19 trillion. All of it passes by beneficiary designation, not by will.
• Most of that money belongs to older owners. 23.8 million IRA holders aged 65 and over held about $8.64 trillion, 59% of all IRA assets. Holders 80 and older alone had $1.50 trillion.
• 16,672,230 federal tax returns (10.4% of all returns) reported IRA withdrawals in 2023, totaling $434.6 billion. Another 29,675,070 returns reported $928.8 billion in pension and annuity income. Combined, that’s $1.36 trillion a year flowing from accounts that are controlled by beneficiary forms or plan rules.
• Wisconsin has the highest share of returns with IRA withdrawals (15.3%), followed by Vermont (14.8%), New Hampshire (14.1%) and Iowa (14.0%). D.C. (6.7%) and Texas (7.6%) are lowest. Among returns filed by people 60 and older, Wisconsin has 50 IRA-withdrawal returns per 100, versus 30 in New Mexico and Mississippi.
• By dollars, California ($45.3 billion), Florida ($36.7 billion), Texas ($31.0 billion) and New York ($23.4 billion) lead in IRA withdrawals.
• A will can’t override a beneficiary form. The federal Thrift Savings Plan says “nothing, including a will, can trump a TSP designation,” and the Office of Personnel Management says the same about federal life insurance. Most private accounts work the same way under their contracts and state law.
• Divorce doesn’t always remove an ex. 33 states automatically cancel an ex-spouse’s beneficiary designation after divorce (scope varies), including Kansas since 2019, Mississippi since 2020 and Louisiana since August 2024. Four more do it in part, and 14 jurisdictions have no such law. But for employer plans covered by ERISA, such as most 401(k)s, federal law overrides those state laws (Egelhoff v. Egelhoff, 2001). The plan pays whoever is on the form.

The rules that decide where this money goes

1. The form beats the will. For retirement accounts, life insurance, and TOD/POD accounts, the company pays the named beneficiary. The SEC’s Investor.gov explains that transfer-on-death registration passes securities “directly to another person or entity upon your death without having to go through probate.”

2. Employer plans protect spouses. Federal law (29 U.S.C. 1055) generally requires a married worker’s 401(k) or pension to go to the spouse unless the spouse signs a written waiver witnessed by a notary or plan representative. Naming your kids on the form doesn’t work without that waiver. (Code B; plan documents govern the details.)

3. ERISA overrides state divorce laws for employer plans. In Egelhoff v. Egelhoff (2001), the Supreme Court held that a Washington law revoking an ex-spouse’s designation was preempted for an ERISA plan. For IRAs and life insurance outside ERISA, state revocation laws can apply; the Court upheld Minnesota’s in Sveen v. Melin (2018).

4. The 10-year rule. Under the IRS’s current rules, most non-spouse heirs who inherit an IRA or plan account must empty it within 10 years. “Eligible designated beneficiaries” get more flexibility: a surviving spouse, the owner’s minor child, a disabled or chronically ill person, or someone not more than 10 years younger than the owner.

5. Naming no one (or your estate) is costly. If the beneficiary is an estate or another non-individual, the IRS applies the pre-2020 rules, which can mean emptying the account within five years. And money paid to an estate can end up going through probate, where creditors and court costs come first.

6. Community property states. In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin, property acquired during the marriage is generally treated as owned by both spouses (IRS Publication 555). Alaska, South Dakota and Tennessee let couples opt in. A spouse there may have a claim to part of an account even if they aren’t on the form. Ask a local attorney before naming someone else.

Divorce and beneficiary forms, by state

Full state table

IRS Statistics of Income, Tax Year 2023 individual returns. Counts are returns, not people (a joint return counts once) and are rounded by the IRS. These are administrative totals, not survey estimates, so there’s no margin of error.

“IRA returns per 100 returns filed by people 60+” compares returns reporting IRA withdrawals to returns whose primary filer is 60 or older. It’s a rough intensity measure, since younger people also take IRA withdrawals. Community property status is from IRS Publication 555.

What this means for your family

• Pull up every beneficiary form: IRAs, 401(k)/403(b), pensions, life insurance, bank POD and brokerage TOD accounts. Check them against your will.
• Name a primary and a contingent beneficiary. If your primary dies first and there’s no backup, the account may default to your estate.
• After a divorce, change the forms yourself. Don’t count on state law, especially for a 401(k).
• Be careful naming minors. A child can’t take control of an account, so a court may need to appoint someone. A trust can be named as beneficiary instead. See trust vs. will and living trust cost.
• Remember what the will still controls: everything without a form, like a house in your name alone, a car, personal belongings and accounts with no beneficiary. See avoiding probate and the small estate affidavit.

Related research: the inherited IRA 10-year rule explains the withdrawal deadline for most non-spouse heirs of a retirement account and the missed-withdrawal penalty.

Related research: households with retirement income by state and same-sex couples, married vs. unmarried, by state.

Methodology

State data. IRS Statistics of Income, Historic Table 2 (individual income and tax data by state), Tax Year 2023, file 23in55cmcsv.csv, all-income-size rows (AGI_STUB = 0). Variables:

• N1 = returns
• ELDERLY = returns with a primary filer 60 or older (per the SOI documentation guide)
• N01400/A01400 = taxable IRA distributions (count and amount, $ thousands)
• N01700/A01700 = taxable pensions and annuities

The U.S. row is the IRS national total in the same file. The IRS rounds counts to the nearest 10. Amounts are taxable amounts reported on Form 1040, so tax-free Roth withdrawals and rollovers aren’t included.

IRA balances. IRS SOI Individual Retirement Arrangements study, Tax Year 2023 (released June 2026), Table 1 (by type of plan) and Table 4 (by age). These come from a matched file of Forms 1040, 1099-R and 5498, and are national only.

Limits. The IRS doesn’t identify inherited IRAs or beneficiary designations in these tables, so we can’t say how many accounts name the wrong person or no one. Tax Year 2024 state data wasn’t available when we pulled.

Legal research. Federal sources:

• IRS “Retirement topics – Beneficiary” (checked October 2026)
• IRS Publication 555
• 29 U.S.C. 1055
• Egelhoff v. Egelhoff, 532 U.S. 141 (2001)
• Sveen v. Melin, 584 U.S. 811 (2018)
• OPM’s FAQ on FEGLI and TSP designations
• SEC Investor.gov on TOD registration

State revocation-on-divorce statutes were read state by state; see the CSV download for each citation and confidence code:

• A: official text, archived.
• B: official source read indirectly.

A “no” means the state’s divorce statute covers wills (and sometimes trusts) and we found no separate law for beneficiary forms. Connecticut considered one in 2026 (HB 5441), but it didn’t get past committee. Georgia, Arkansas and Tennessee were read in the states’ official code releases through a public mirror (code B).

This is general information, not legal or tax advice.

Sources

• IRS SOI, Historic Table 2, TY2023: https://www.irs.gov/pub/irs-soi/23in55cmcsv.csv (documentation: https://www.irs.gov/pub/irs-soi/23incmdocguide.doc)
• IRS SOI IRA study, TY2023, Tables 1 and 4: https://www.irs.gov/pub/irs-soi/23in01ira.xlsx and https://www.irs.gov/pub/irs-soi/23in04ira.xlsx
• IRS, Retirement topics – Beneficiary: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary
• IRS Publication 555, Community Property: https://www.irs.gov/publications/p555
• 29 U.S.C. 1055: https://www.law.cornell.edu/uscode/text/29/1055
• Egelhoff v. Egelhoff, 532 U.S. 141 (2001): https://www.law.cornell.edu/supremecourt/text/99-1529
• Sveen v. Melin (2018): https://www.law.cornell.edu/supremecourt/text/16-1432
• OPM FAQ on designations, FEGLI and TSP: https://www.opm.gov/frequently-asked-questions/domestic-partner-benefits-faq/beneficiary/in-regards-to-designation-an-employee-can-designate-a-trust-true-also-it-is-true-that-nothing-including-a-will-can-trump-a-designation
• SEC Investor.gov, Transferring Assets: https://www.investor.gov/additional-resources/information/seniors/transferring-assets
• Mississippi SB 2851 (2020): https://billstatus.ls.state.ms.us/documents/2020/html/SB/2800-2899/SB2851CS.htm
• State statutes: the CSV download

Related research: forgotten savings bonds (matured paper bonds that heirs often never find) and Social Security’s share of state income (a benefit that does not follow a will).

FAQ

Does my will control who gets my IRA or 401(k)?

No. The beneficiary form does. If you name no one, the plan’s default rules apply, which may send it to your spouse or your estate.

What happens if my beneficiary dies before me?

The contingent beneficiary gets it. With no contingent beneficiary, it usually goes to your estate or follows the plan’s default order, which can mean probate and a faster payout schedule.

My ex is still on my 401(k). Does my divorce fix that?

Probably not. For ERISA plans, federal law says the plan pays the named beneficiary, regardless of state divorce laws. Change the form.

Can I leave my 401(k) to my kids instead of my spouse?

Only if your spouse signs a written waiver that’s notarized or witnessed by a plan representative. IRAs don’t have the same federal rule, but community property law may still give your spouse a claim.

How long do my kids have to take money out of an inherited IRA?

Most adult children must empty it by the end of the 10th year after the year of death. A minor child of the account owner counts as an “eligible designated beneficiary” under IRS rules and has more options.

Should I name my trust as beneficiary?

Sometimes, especially for minors or a beneficiary who needs help managing money. The trust has to be drafted with retirement accounts in mind. See trust vs. will.

Cite this data

Published October 6, 2026 by Family Estate Guide. Data vintage: IRS SOI Tax Year 2023 state data and IRA study. Rules checked October 6, 2026. Editorial standards.