The below written update has been provided by JACQUELINE MOTYL, ESQUIRE from our Taxation and Wealth Planning Group.
Under amendments to the Divorce Code effective in 2005, a spouse’s right to an elective share terminates once grounds for divorce have been established. See 20 Pa. C.S.A. § 2203(a); 23 Pa. C.S.A. § 3323(d.1). If a party to a divorce dies once grounds for divorce have been established, the opposing party-spouse’s economic rights will be determined pursuant to the Pennsylvania Divorce Code, and the opposing party-spouse will not be entitled to an elective share. See 23 Pa. C.S.A. § 3323(d.1).
Grounds for divorce may be established when (1) the court adopts a report of the master or finds that fault grounds for divorce exist, (2) both parties have filed affidavits of consent to the divorce, or (3) an affidavit of two-year separation and irretrievable breakdown has been filed without a contesting counter-affidavit filed by the opposing party-spouse or (4) a counter-affidavit contesting an affidavit of two-year separation and irretrievable breakdown has been filed and the court determines that grounds for divorce exist. See id. at § 3323(g).
The Superior Court of Pennsylvania recently muddied these otherwise clear waters when it ruled that a spouse can terminate a divorce action after the death of the opposing party-spouse despite the fact that grounds for divorce had been established. See Tosi v. Kizis, 2014 Pa. Super. 16 (Feb. 6, 2014). In Tosi, Husband died after grounds for divorce had been established but before a divorce decree was entered. After Husband’s death, Wife voluntarily elected to discontinue the divorce proceeding. The court ruled that Wife could discontinue the divorce action despite the fact that grounds had been established. The court reasoned that Section 3323 of the Pennsylvania Divorce Code provides only that a divorce action does not automatically terminate upon the death of a party to the divorce. 23 Pa. C.S.A. § 3323(d.1). Therefore, Wife retained the right to voluntarily discontinue the divorce action.
The Tosi court noted, however, that Husband (through his representative) had the right to contest the discontinuance of the divorce action by showing that the discontinuance would result in unreasonable inconvenience, vexation, harassment, expense or prejudice. Husband, however, failed to put forth such evidence, and so, Wife was allowed to discontinue the divorce action. By discontinuing the divorce action, Wife regained her option to take under Husband’s will or against it, via the elective share.
For the past decade we have discussed how one can try a case against a deceased party in a world where the Dead Man’s Rule effectively forecloses most of the surviving spouse’s ability to testify. This case offers a new judicial quandary: one spouse dies; the surviving spouse files to withdraw her divorce action. The estate of the decedent contests. How does a trial court evaluate whether the discontinuance would be inconvenient, vexatious, harassing, expensive or unfair? Would that not require the Court to evaluate the merits of the underlying equitable distribution and make a judgment about who better deserves the money in play? The answer would seem to be “yes”.
One thing seems clear. Once divorce grounds are established a new estate plan is in order. Whether it will be honored is, today, far less clear.