The use of of beneficiary designations is gaining in popularity. However, problems can develop.
Beneficiary designation forms can be an easy way to quickly distribute many financial assets to heirs. However, complications may lurk behind the apparent simplicity, according to Wealth Management in "Designating a Beneficiary -- Not as Easy as it Looks."
The problem is that the financial institution holding the account wants it to be as simple as possible for it to find and distribute assets to the designated beneficiary. Ideally the account will pass to one individual who is clearly identified and whose locating information is available on the designation form. However, this is often far from ideal for the account holder who might want the assets in the account to be divided between multiple beneficiaries, whose locations might change over time. There are some other problems, such as potential tax differences between different types of beneficiaries.
An estate planning attorney can advise you on the best use of designating beneficiaries and the dangers to an estate plan.
Reference: Wealth Management (April 23, 2018) "Designating a Beneficiary -- Not as Easy as it Looks."