23 Pa.C.S.A. 3323(d.1) was added to the divorce code in 2007, and states that where grounds for the divorce have been established prior to the death of one of the parties, the parties’ econmic rights are to be determined under the divorce code, not 20 Pa.C.S.A (relating to decedents, estates and fiduciaries).
In Yelenic v. Clark, an April 2007 decision of the Superior Court, it was held that where Husband died prior to the execution of a settlement agreement and prior to the entry of the divorce decree, Section 3323(d.1) required that the parties assets be distributed pursuant to the divorce code, but that no "posthumous divorce decree" would be issued.
The Estate of the husband made an interesting argument, claiming that the failure of the court to enter a divorce decree might permit a "double dip" by the surviving spouse. She could be entitled to additional property as the beneficiary of insurance policies and retirement accounts that were not updated prior to the death of the husband. Even though the agreement of the parties or the court’s order might hold that the deceased was to retain property, if the named beneficiary on the policy or account was the surviving spouse, the surviving spouse would receive those funds as the named beneficiary despite the equitable distribution scheme.
The Estate concluded this argument, pointing out that if a divorce decree were issued, this unfair result would be avoided.
The Superior Court’s response was interesting. In upholding the trial court’s conclusion that Section 3323(d.1) only permits the resolution of the economic rights, and not the entry of a divorce decree, the Superior court went on to say:
"… parties to divorce actions would be well advised to change their wills or prepare a will before grounds for divorce are established." [emphasis added]
This is good advice – clients should be advised that they should be looking at their estate plans during their divorce.