The five holes in your will

Last Will and Testament. Sounds majestic, doesn't it? And reassuring: Once you've had your will prepared, signed, and witnessed, you'll probably feel you've done right by your heirs. But many doctors fail to realize how much of an estate may not fall under the provisions of your will. Let's see where five of the biggest holes are, and how you might fill them.

1. Assets promised through beneficiary forms Life insurance is typically among a physician's major assets, and those policies are controlled by beneficiary forms. Suppose you name your spouse as sole beneficiary and he passes away before you do. The insurance payout could end up being part of your estate, not protected from any claims against it. Ideally, you should put the policy into a trust, for tax savings. But at the very least, you should simply list your children as secondary beneficiaries, which will protect the funds from creditors.

2. Marital agreements Divorce settlements and prenuptial agreements often affect estates significantly and unexpectedly: When there's a conflict between such an agreement and a will, the former takes precedence. So if your agreement says you'll leave a certain piece of real estate to a spouse, it doesn't matter what you say in your will later. "If you promise a percentage of assets, you'll be less locked in," says Norristown, PA, attorney David J. Schiller, "because you could decrease the size of your estate by the gifts you make to others during your lifetime."

In particular, doctors should watch out for the impact that marital agreements may have on pension plans. By law, a surviving spouse generally has rights under all retirement plans, even if he or she isn't specified as the beneficiary. If a doctor's fiancee waives claim to a retirement plan in a prenuptial agreement, there's still a trap. Since only a spouse can waive such rights, the fiancee should sign the plan's waiver form after the wedding, or else the prenup waiver may fail.

The law can also favor ex-spouses. Suppose you name your spouse as beneficiary of a pension plan but forget to change it when you divorce. Later, in the divorce papers, the two of you mutually give up "any right, title, or interest in and to any earnings . . . pension plans, profit-sharing plans . . . or property" of the other. A federal appeals court ruled several years ago that because a similar agreement didn't specifically mention the plan in question, the ex-wife was still entitled to it.

Marital and divorce agreements are often made under great stress, and courts can be unpredictable. So have an estate-planning lawyer review any such agreements-ideally, before you sign them.