May 20, 2026
Seven years after Ed Lyon’s death, his heirs — all 36 of them — are still fighting for their inheritance. There’s no drama among them. Rather, the problem comes down to improper paperwork.
Lyon, a prestigious urologist at the University of Chicago, passed away in 2019. He wanted his retirement account, worth about $1.2 million at his time of death, to be divided among his 36 grandchildren in 36 separate trusts.
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But the inheritance, which is now worth about $1.7 million, is still stuck in limbo. The Teachers Insurance and Annuity Association of America (TIAA) has said it can’t process the form because it wasn’t signed properly, reports The Wall Street Journal.
That has led to questions around the validity of a spousal waiver.
“They said ‘no’ to anything that would resolve it,” Alice Lyon, one of Lyon’s 12 children, told The Wall Street Journal. “It’s supposed to go to the grandchildren. It’s his legacy and this hits us all to the core.”
The TIAA, for its part, argues that it’s not responsible for negligence regarding incomplete paperwork.
The timing is important. Lyon passed away in 2019, when tax rules allowed heirs to stretch minimum distributions from retirement accounts over their lifetime, meaning the funds would grow tax-deferred. That rule changed in 2020 for most beneficiaries, except spouses.
If the family loses in court, the funds would likely be distributed to the widow’s estate, and though they’d eventually get their money, they’d be stripped of long-term tax advantages.
Not a millionaire? You still need an estate plan
Though Lyon left behind over $1M for his heirs, an estate plan isn’t just for millionaires. It explains how your assets should be divided after death and how your finances and medical care should be managed should you become incapacitated.
This can help to avoid legal disputes (including conflicts among family members), while minimizing inheritance and estate taxes. Without a will, state laws dictate how your assets are distributed.
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Yet, in 2025, only about a quarter (24%) of Americans had a will, 13% had a living trust and 4% had other estate planning documents, according to Caring’s 2025 Wills and Estate Planning Survey. Of those without a will, 43% said they “just haven’t gotten around to it.”
Even if you have will, if it’s not properly executed, it could make life complicated for your loved ones, delaying the distribution of your assets and potentially leading to court battles like the one the Lyon family faces.
An estate plan consists of several legal documents beyond your will and last testament. For example, a living will (also known as an advance healthcare directive) details your medical preferences if you are unable to make those decisions for yourself.
However, when it comes to retirement accounts such as 401(k)s and IRAs, those pass directly to the person named on the beneficiary designation form, bypassing any directives in your will.
Workplace retirement accounts are typically paid out to a surviving spouse or the last recorded beneficiary. And that typically supersedes your will.
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A major estate planning mistake is updating your will but forgetting to update the beneficiary on your workplace retirement account, life insurance policy or pension. For example, if your ex-spouse is the designated beneficiary of your 401(k), your ex could still legally inherit those funds, even if your will states otherwise.
Issues could also arise if the primary beneficiary of your workplace retirement account passes away and you haven’t named a backup. At that point, the account will default to your estate, which triggers the probate process.
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How to avoid common estate planning mistakes
First off, it’s important to create an estate plan if you don’t already have one, including an advance healthcare directive. But, as the Lyon family has discovered, documents that are incomplete or contain errors can cause major headaches for heirs.
While it’s not necessary to hire an estate attorney, it could be a good idea, particularly if your estate is complex (say, you own a business or real estate) or if you want to set up trusts to minimize estate taxes. It could also be a good idea if you’re dealing with complicated family dynamics, such as a blended family.
Make sure you’ve assigned or updated beneficiaries to your workplace retirement accounts, as well as pensions, bank accounts and life insurance policies. Review and revise your estate plan after any major life events, such as a marriage, divorce or birth of children or grandchildren, or after acquiring major assets.
Also consider revisiting your estate plan every three to five years to “help ensure alignment with current laws,” says Fidelity.
For example, the One Big Beautiful Bill Act, signed into law last July, has raised the federal estate, gift and generation-skipping transfer (GST) tax exemptions to $15 million for individuals and $30 million for married couples, with annual adjustments for inflation.
Another important step is sharing your estate plan with your loved ones while you’re still alive. It may be an uncomfortable conversation, but it can help to prevent confusion or conflict after you pass, and potentially avoid a beneficiary nightmare.
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Vawn Himmelsbach is a veteran journalist who covers tech, business, finance and travel. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, CBC News, Yahoo Finance, MSN, CAA Magazine, Travelweek, Explore Magazine and Consumer Reports.
