New PA Law Requires Beneficiary Designation Notices in Divorce Decree

Effective May 2, 2023, Pennsylvania law now requires all divorce decrees to include a notice concerning the designation of beneficiaries for certain assets, namely life insurance policies and retirement accounts. Newly enacted 20 Pa.C.S. § 6111.2 is designed to give guidelines for changing beneficiary designations after a divorce, and states that if a former spouse passes away and is either divorced, or if the grounds for divorce have been established, then any beneficiary designation by the deceased ex-spouse to the surviving ex-spouse is invalid. There is one exception to the law, which does not invalidate the beneficiary designation provided the deceased ex-spouse makes clear in a separate, later executed written document, that the designation is meant to remain effective.

Before the enactment of this law, if an individual were designated beneficiary on the ex-spouse’s life insurance policy, retirement account, or other similar asset, the designation would remain valid even after a divorce, unless the individual took affirmative action to change the beneficiary. This often led to unintended consequences, as individuals may have forgotten to change their beneficiary designations after a divorce or may not have realized that they needed to take action to do so. Under the new law, the burden is taken off the policy/account holder spouse.

New Language Requirement

Under 20 Pa.C.S. § 6111.2, the following notice must be in boldface type on the Decree: The parties shall reaffirm or change the beneficiary status on any life insurance policies, annuity contracts, pensions, profit sharing plans, or other contractual arrangements providing for payment to a spouse if it is the intention of one of the parties to keep or change the other party as a beneficiary. Failure to do so may result in revocation of the beneficiary designation pursuant to 20 Pa.C.S. § 6111.2 (Effect of Divorce or Pending Divorce on Designation of Beneficiaries).