Changes in the Pennsylvania Divorce Code

03.23.23

An important change to the Divorce Code will have a significant impact on contractual beneficiary designations effective May 2, 2023. Section 3323 has been amended to add subparagraph (b.1) which provides in part, “[a]n order accompanying a Decree of Divorce or annulment of the marriage shall include a provision informing the parties to reaffirm or change the beneficiary status” …on all contractual arrangements providing payment to a spouse such as life insurance policies, annuities and retirement plans “…if it is the intention of one of the parties to keep or change the other party as a beneficiary”. Attorneys must also affirmatively warn the parties failure to have such a provision in their agreement or court order may result in revocation of the beneficiary designation. 

Parties often enter into divorce agreements which provide for the beneficiary designations to a retirement plan or life insurance policy. The amendment to the divorce code now dictates agreements must include a specific provision which confirms whether a spouse is affirming the beneficiary status or terminating the beneficiary designation. Failure to do so may result in a spouse not receiving negotiated benefits such as those payable under a life insurance policy. Particular attention should be made to any provisions in an agreement in which beneficiary designations will need to be made pursuant to a divorce. 

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