Pennsylvania Act 2004-175 — PROBATE, ESTATES AND FIDUCIARIES CODE (20 PA.C.S.) AND DOMESTIC RELATIONS CODE (23 PA.C.S.) - OMNIBUS AMENDMENTS

Act text

PROBATE, ESTATES AND FIDUCIARIES CODE (20 PA.C.S.) AND DOMESTIC RELATIONS
                  CODE (23 PA.C.S.) - OMNIBUS AMENDMENTS
                 Act of Nov. 29, 2004, P.L. 1357, No. 175             Cl. 20
                             Session of 2004
                               No. 2004-175

     SB 95

                                  AN ACT

     Amending Titles 20 (Decedents, Estates and Fiduciaries) and 23
        (Domestic Relations) of the Pennsylvania Consolidated
        Statutes, further providing for right of surviving spouse to
        elective share; further defining "separate and apart" for
        purposes of divorce; providing for premarital agreements;
        further providing for decree of court in actions for divorce;
        further defining "marital property" for purposes of certain
        property rights; and further providing for equitable division
        of marital property, for disposition of property to defeat
        obligations and for statement of reasons for distribution.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Section 2203(a) of Title 20 of the Pennsylvania
     Consolidated Statutes is amended and the section is amended by
     adding a subsection to read:
      § 2203.  Right of election; resident decedent.
        (a)  Property subject to election.--[When] Except as provided
     in subsection (c), when a married person domiciled in this
     Commonwealth dies, his surviving spouse has a right to an
     elective share of one-third of the following property:
            (1)  Property passing from the decedent by will or
        intestacy.
            (2)  Income or use for the remaining life of the spouse
        of property conveyed by the decedent during the marriage to
        the extent that the decedent at the time of his death had the
        use of the property or an interest in or power to withdraw
        the income thereof.
            (3)  Property conveyed by the decedent during his
        lifetime to the extent that the decedent at the time of his
        death had a power to revoke the conveyance or to consume,
        invade or dispose of the principal for his own benefit.
            (4)  Property conveyed by the decedent during the
        marriage to himself and another or others with right of
        survivorship to the extent of any interest in the property
        that the decedent had the power at the time of his death
        unilaterally to convey absolutely or in fee.
            (5)  Survivorship rights conveyed to a beneficiary of an
        annuity contract to the extent it was purchased by the
        decedent during the marriage and the decedent was receiving
        annuity payments therefrom at the time of his death.
            (6)  Property conveyed by the decedent during the
        marriage and within one year of his death to the extent that
        the aggregate amount so conveyed to each donee exceeds
        $3,000, valued at the time of conveyance.
     In construing this subsection, a power in the decedent to
     withdraw income or principal, or a power in any person whose
     interest is not adverse to the decedent to distribute to or use
     for the benefit of the decedent any income or principal, shall
     be deemed to be a power in the decedent to withdraw so much of
     the income or principal as is subject to such power, even though
     such income or principal may be distributed only for support or
     other particular purpose or only in limited periodic amounts.
        * * *
        (c)  Nonapplicability.--Pursuant to 23 Pa.C.S. § 3323(d.1)
     (relating to decree of court), this section shall not apply in
     the event a married person domiciled in this Commonwealth dies
     during the course of divorce proceedings, no decree of divorce
     has been entered pursuant to 23 Pa.C.S. § 3323 and grounds have
     been established as provided in 23 Pa.C.S. § 3323(g).
        Section 1.1.  The definition of "separate and apart" in
     section 3103 of Title 23 is amended to read:
      § 3103.  Definitions.
        The following words and phrases when used in this part shall
     have the meanings given to them in this section unless the
     context clearly indicates otherwise:
        * * *
        "Separate and apart."  [Complete cessation] Cessation of [any
     and all] cohabitation, whether living in the same residence or
     not. In the event a complaint in divorce is filed and served, it
     shall be presumed that the parties commenced to live separate
     and apart not later than the date that the complaint was served.
        * * *
        Section 2.  Title 23 is amended by adding a section to read:
      § 3106.  Premarital agreements.
        (a)  General rule.--The burden of proof to set aside a
     premarital agreement shall be upon the party alleging the
     agreement to be unenforceable. A premarital agreement shall not
     be enforceable if the party seeking to set aside the agreement
     proves, by clear and convincing evidence, that:
            (1)  the party did not execute the agreement voluntarily;
        or
            (2)  the party, before execution of the agreement:
                (i)  was not provided a fair and reasonable
            disclosure of the property or financial obligations of
            the other party;
                (ii)  did not voluntarily and expressly waive, in
            writing, any right to disclosure of the property or
            financial obligations of the other party beyond the
            disclosure provided; and
                (iii)  did not have an adequate knowledge of the
            property or financial obligations of the other party.
        (b)  Definition.--As used in this section, the term
     "premarital agreement" means an agreement between prospective
     spouses made in contemplation of marriage and to be effective
     upon marriage.
        Section 3.  Sections 3323(c), 3501(a) and 3502(a) of Title 23
     are amended and the sections are amended by adding subsections
     to read:
      § 3323.  Decree of court.
        * * *
        [(c)  Bifurcation.--In the event that the court is unable for
     any reason to determine and dispose of the matters provided for
     in subsection (b) within 30 days after the report of the master
     has been filed, it may enter a decree of divorce or annulment.
     Upon the request of either party and after a hearing, the court
     may order alimony pendente lite, reasonable counsel fees, costs
     and expenses and may make a temporary order necessary to protect
     the interests of the parties pending final disposition of the
     matters in subsection (b).]
        (c.1)  Bifurcation.--With the consent of both parties, the
     court may enter a decree of divorce or annulment prior to the
     final determination and disposition of the matters provided for
     in subsection (b). In the absence of the consent of both
     parties, the court may enter a decree of divorce or annulment
     prior to the final determination and disposition of the matters
     provided for in subsection (b) if:
            (1)  grounds have been established as provided in
        subsection (g); and
            (2)  the moving party has demonstrated that:
                (i)  compelling circumstances exist for the entry of
            the decree of divorce or annulment; and
                (ii)  sufficient economic protections have been
            provided for the other party during the pendency of the
            disposition of the matters provided for in subsection
            (b).
        * * *
        (d.1)  Death of a party.--In the event one party dies during
     the course of divorce proceedings, no decree of divorce has been
     entered and grounds have been established as provided in
     subsection (g), the parties' economic rights and obligations
     arising under the marriage shall be determined under this part
     rather than under 20 Pa.C.S. (relating to decedents, estates and
     fiduciaries).
        * * *
        (g)  Grounds established.--For purposes of subsections (c.1)
     and (d.1), grounds are established as follows:
            (1)  In the case of an action for divorce under section
        3301(a) or (b) (relating to grounds for divorce), the court
        adopts a report of the master or makes its own findings that
        grounds for divorce exist.
            (2)  In the case of an action for divorce under section
        3301(c), both parties have filed affidavits of consent.
            (3)  In the case of an action for divorce under section
        3301(d), an affidavit has been filed and no counter-affidavit
        has been filed or, if a counter-affidavit has been filed
        denying the affidavit's averments, the court determines that
        the marriage is irretrievably broken and the parties have
        lived separate and apart for at least two years at the time
        of the filing of the affidavit.
      § 3501.  Definitions.
        (a)  General rule.--As used in this chapter, "marital
     property" means all property acquired by either party during the
     marriage[, including the increase in value, prior to the date of
     final separation,] and the increase in value of any nonmarital
     property acquired pursuant to paragraphs (1) and (3)[, except:]
     as measured and determined under subsection (a.1). However,
     marital property does not include:
            (1)  Property acquired prior to marriage or property
        acquired in exchange for property acquired prior to the
        marriage.
            (2)  Property excluded by valid agreement of the parties
        entered into before, during or after the marriage.
            (3)  Property acquired by gift, except between spouses,
        bequest, devise or descent or property acquired in exchange
        for such property.
            (4)  Property acquired after final separation until the
        date of divorce, except for property acquired in exchange for
        marital assets.
            (5)  Property which a party has sold, granted, conveyed
        or otherwise disposed of in good faith and for value prior to
        the date of final separation.
            (6)  Veterans' benefits exempt from attachment, levy or
        seizure pursuant to the act of September 2, 1958 (Public Law
        85-857, 72 Stat. 1229), as amended, except for those benefits
        received by a veteran where the veteran has waived a portion
        of his military retirement pay in order to receive veterans'
        compensation.
            (7)  Property to the extent to which the property has
        been mortgaged or otherwise encumbered in good faith for
        value prior to the date of final separation.
            (8)  Any payment received as a result of an award or
        settlement for any cause of action or claim which accrued
        prior to the marriage or after the date of final separation
        regardless of when the payment was received.
        (a.1)  Measuring and determining the increase in value of
     nonmarital property.--The increase in value of any nonmarital
     property acquired pursuant to subsection (a)(1) and (3) shall be
     measured from the date of marriage or later acquisition date to
     either the date of final separation or the date as close to the
     hearing on equitable distribution as possible, whichever date
     results in a lesser increase. Any decrease in value of the
     nonmarital property of a party shall be offset against any
     increase in value of the nonmarital property of that party.
     However, a decrease in value of the nonmarital property of a
     party shall not be offset against any increase in value of the
     nonmarital property of the other party or against any other
     marital property subject to equitable division.
        * * *
        (c)  Defined benefit retirement plans.--Notwithstanding
     subsections (a), (a.1) and (b):
            (1)  In the case of the marital portion of a defined
        benefit retirement plan being distributed by means of a
        deferred distribution, the defined benefit plan shall be
        allocated between its marital and nonmarital portions solely
        by use of a coverture fraction. The denominator of the
        coverture fraction shall be the number of months the employee
        spouse worked to earn the total benefit and the numerator
        shall be the number of such months during which the parties
        were married and not finally separated. The benefit to which
        the coverture fraction is applied shall include all
        postseparation enhancements except for enhancements arising
        from postseparation monetary contributions made by the
        employee spouse, including the gain or loss on such
        contributions.
            (2)  In the case of the marital portion of a defined
        benefit retirement plan being distributed by means of an
        immediate offset, the defined benefit plan shall be allocated
        between its marital and nonmarital portions solely by use of
        a coverture fraction. The denominator of the coverture
        fraction shall be the number of months the employee spouse
        worked to earn the accrued benefit as of a date as close to
        the time of trial as reasonably possible and the numerator
        shall be the number of such months during which the parties
        were married and not finally separated. The benefit to which
        the coverture fraction is applied shall include all
        postseparation enhancements up to a date as close to the time
        of trial as reasonably possible except for enhancements
        arising from postseparation monetary contributions made by
        the employee spouse, including the gain or loss on such
        contributions.
      § 3502.  Equitable division of marital property.
        (a)  General rule.--[In] Upon the request of either party in
     an action for divorce or annulment, the court shall[, upon
     request of either party,] equitably divide, distribute or
     assign, in kind or otherwise, the marital property between the
     parties without regard to marital misconduct in such
     [proportions] percentages and in such manner as the court deems
     just after considering all relevant factors[, including:]. The
     court may consider each marital asset or group of assets
     independently and apply a different percentage to each marital
     asset or group of assets. Factors which are relevant to the
     equitable division of marital property include the following:
            (1)  The length of the marriage.
            (2)  Any prior marriage of either party.
            (3)  The age, health, station, amount and sources of
        income, vocational skills, employability, estate, liabilities
        and needs of each of the parties.
            (4)  The contribution by one party to the education,
        training or increased earning power of the other party.
            (5)  The opportunity of each party for future
        acquisitions of capital assets and income.
            (6)  The sources of income of both parties, including,
        but not limited to, medical, retirement, insurance or other
        benefits.
            (7)  The contribution or dissipation of each party in the
        acquisition, preservation, depreciation or appreciation of
        the marital property, including the contribution of a party
        as homemaker.
            (8)  The value of the property set apart to each party.
            (9)  The standard of living of the parties established
        during the marriage.
            (10)  The economic circumstances of each party[,
        including Federal, State and local tax ramifications,] at the
        time the division of property is to become effective.
            (10.1)  The Federal, State and local tax ramifications
        associated with each asset to be divided, distributed or
        assigned, which ramifications need not be immediate and
        certain.
            (10.2)  The expense of sale, transfer or liquidation
        associated with a particular asset, which expense need not be
        immediate and certain.
            (11)  Whether the party will be serving as the custodian
        of any dependent minor children.
        * * *
        (f)  Partial distribution.--The court, upon the request of
     either party, may at any stage of the proceedings enter an order
     providing for an interim partial distribution or assignment of
     marital property.
        Section 4.  Sections 3505(d) and 3506 of Title 23 are amended
     to read:
      § 3505.  Disposition of property to defeat obligations.
        * * *
        (d)  Constructive trust for undisclosed assets.--If a party
     fails to disclose information required by [subsection (b)]
     general rule of the Supreme Court and in consequence thereof an
     asset or assets with a fair market value of [$500] $1,000 or
     more is omitted from the final distribution of property, the
     party aggrieved by the nondisclosure may at any time petition
     the court granting the award to declare the creation of a
     constructive trust as to all undisclosed assets for the benefit
     of the parties and their minor or dependent children, if any.
     The party in whose name the assets are held shall be declared
     the constructive trustee unless the court designates a different
     trustee, and the trust may include any terms and conditions the
     court may determine. The court shall grant the petition upon a
     finding of a failure to disclose the assets as required [under
     subsection (b)] by general rule of the Supreme Court.
        * * *
      § 3506.  Statement of reasons for distribution.
        In an order made under this chapter for the distribution of
     property, the court shall set forth the percentage of
     distribution for each marital asset or group of assets and the
     reason for the distribution ordered.
        Section 5.  This act shall apply as follows:
            (1)  The amendment of the definition of "separate and
        apart" in 23 Pa.C.S. § 3103 shall apply to complaints served
        before, on or after the effective date of this paragraph.
            (2)  The addition of 23 Pa.C.S. § 3106 shall apply to
        premarital agreements executed on or after the effective date
        of this paragraph.
            (3)  The amendment or addition of 23 Pa.C.S. § 3323(c)
        and (c.1) shall apply to bifurcation proceedings commenced on
        or after the effective date of this paragraph.
            (4)  The amendment or addition of 20 Pa.C.S. § 2203(a)
        and (c) and 23 Pa.C.S. § 3323(d.1) shall apply to the death
        of one of the parties on or after the effective date of this
        paragraph irrespective of whether the divorce proceeding was
        commenced before, on or after the effective date of this
        paragraph.
            (5)  The addition of 23 Pa.C.S. § 3323(g) shall apply to
        bifurcation proceedings commenced on or after the effective
        date of this paragraph and cases in which one of the parties
        dies on or after the effective date of this paragraph.
            (6)  The amendment or addition of 23 Pa.C.S. § 3501(a)(3)
        and (a.1) shall apply to all equitable distribution
        proceedings irrespective of whether the proceeding was
        commenced before, on or after the effective date of this
        paragraph.
            (7)  The amendment of 23 Pa.C.S. § 3501(c) shall apply to
        all equitable distribution proceedings commenced on or after
        the effective date of this paragraph.
            (8)  The amendment or addition of 23 Pa.C.S. § 3502(a)
        introductory paragraph, (10.1) and (10.2) shall apply to all
        equitable distribution proceedings irrespective of whether
        the proceeding was commenced before, on or after the
        effective date of this paragraph.
            (9)  The addition of 23 Pa.C.S. § 3502(f) shall apply to
        all divorce proceedings irrespective of whether the action
        was commenced before, on or after the effective date of this
        paragraph.
            (10)  The amendment of 23 Pa.C.S. § 3505(d) shall apply
        to all equitable distribution proceedings irrespective of
        whether the proceeding was commenced before, on or after the
        effective date of this paragraph.
            (11)  The amendment of 23 Pa.C.S. § 3506 shall apply to
        all orders made on or after the effective date of this
        paragraph.
        Section 6.  This act shall take effect in 60 days.

     APPROVED--The 29th day of November, A. D. 2004.

     EDWARD G. RENDELL