We all need a will. But a will does not govern how insurance proceeds and IRAs will pass to heirs. Beneficiary designations do. A will doesn't necessarily dictate to whom your property will go after you die, either. Accordingly, whenever a major life event (marriage, birth, divorce, death) occurs, you must update your beneficiaries.

What happens if you don't? Here's one example, sent in by a Fool reader:

My friend's husband died this past December, and they were just married in May. He had three IRA accounts. She was not listed as a beneficiary on any of them. Her husband's sister is listed on all three accounts, and on one account ($345,634) he had an ex-girlfriend also listed as the beneficiary.

His widow is the administrator of his estate. Are there any rules governing situations like this? We learned that if these accounts were employer-sponsored, then the Employee Retirement Income Security Act of 1974 (ERISA) would apply. Under ERISA, when the owner of the account dies, the surviving spouse receives 50% of the funds regardless of who is the appointed beneficiary. Is there anything she can do?

They were very organized and planned to do all of this paperwork in January before his untimely death. They had even hired a lawyer to handle all of the property and money accounts. No one imagined that January wouldn't be soon enough.

Sadly, there was little consolation I could offer the writer. As she pointed out, had these accounts been in an employer's qualified retirement plan, then by law the spouse would receive at least half of the retirement plan benefit to which the deceased was entitled when he died unless the spouse consented to the selection of a different beneficiary by the husband.

Unfortunately, ERISA does not apply to IRAs or insurance policies. In this case, the husband had previously designated other beneficiaries for his accounts. He did not change those designations when he married. Therefore, even if he stated in his will that he wanted his new bride to receive his life insurance and his IRAs when he died, the life insurance companies and IRA custodians must -- again by law -- comply with the existing beneficiary designations.

In this case they did, and that meant the new bride lost out. And the fact that he meant to change those designations has absolutely no bearing on the matter under the law. He did not make the necessary changes during his lifetime. Therefore, the proceeds must go to whoever was the designated beneficiary on the day he died.

You can see how important it is for couples to look at who they have designated as beneficiaries for their insurance and IRAs. And while appropriate corrective action was planned in this instance, it just didn't happen soon enough. Certainly that wasn't what the deceased intended.

Moral? Act now or it could be too late. If you marry, divorce, give birth to a child, or experience a death in the family, then it's time to act. Don't postpone or delay. When one of these major life events occurs, act immediately to change your beneficiaries as needed. That's the only way you will ensure you have protected those you wish.

But don't stop there. You should also review how you hold title to property. That, too, will determine how those assets will pass to others if you die. You may be the sole owner of the property. In that event, you may sell it, mortgage it, give it away, or bequeath it as you deem fit. If you own it at death, then it is part of your estate, and it will be disposed of as you provide for in your will.

Property may also be owned jointly with one or more other persons. You could hold title equally with someone else in a joint tenancy with right of survivorship (JTWROS) arrangement. JTWROS may exist between any two or more persons, not just husband and wife. In this arrangement, if one of the joint owners dies, that owner's share in the property will pass by operation of law to the other joint owner(s). Your will will not control the disposition of that property even if it specifies that your share should pass to someone else. The governing document will be your JTWROS agreement.

There is another form of title called tenancy by the entirety that exists for spouses only. While similar to JTWROS, the survivorship rights to the property typically may not be ended without the consent of both spouses. That's not necessarily true of a JTWROS arrangement. A creditor of one of the joint tenants of a JTWROS property could claim the share held by that owner, thus destroying the survivorship benefit of that part of the asset for the other joint tenant(s).

Another form of joint ownership is tenancy in common. In this arrangement, a tenant-in-common's interest at death will pass to that person's beneficiaries rather than to the other tenant(s)-in-common. Additionally, in this form of ownership there may be an unequal division of the asset (e.g., a 60% share versus a 40% share) between the owners. In JTWROS and tenancy by the entirety arrangements, there is always an equal division of interest.

In community property states, property acquired by either spouse during the marriage is almost always considered as jointly and equally owned by both spouses. That is true regardless of who owns the property. While the owner may bequeath 50% of community property to someone other than a spouse, at death at least 50% must go to the surviving spouse.

As you can see, the issue of "who owns what" can get pretty complicated, and we recommend seeking professional advice if you're at all confused. Just make sure you hire someone who is an estate planning expert in your state. For more tips on picking the best pro, visit our Advisor Center. Finally, you have just two weeks left to contribute to a 2003 IRA if you haven't done so already. Our IRA Center has all the details.