Changing Beneficiaries After Divorce in Pennsylvania

Pennsylvania law automatically revokes your ex-spouse as a beneficiary on some accounts when your divorce is finalized. But it does not cover all of them — and the gap can cost your family hundreds of thousands of dollars.

The critical distinction is between state-regulated accounts and federally regulated ERISA accounts. Mixing them up is one of the most expensive mistakes in post-divorce planning.

What Pennsylvania Law Does Automatically

Under 20 Pa.C.S. § 6111.2, a final divorce decree automatically revokes your ex-spouse as a beneficiary on state-law governed non-probate transfers. This includes:

• Standard individual life insurance policies
• Transfer-on-death (TOD) brokerage accounts
• Payable-on-death (POD) bank accounts
• Annuities regulated under state insurance law

Once the decree is entered, the law treats your ex-spouse as having predeceased you for purposes of these accounts. If no contingent beneficiary is named, the proceeds go to your estate (which may trigger probate — another reason to name a new beneficiary rather than relying on the automatic revocation).

What Pennsylvania Law Cannot Touch: ERISA Accounts

Here is where it gets dangerous. Federal ERISA law governs employer-sponsored retirement plans and group benefits. Under ERISA preemption, the plan administrator is legally required to pay the beneficiary named on the form on file — regardless of what your divorce decree says, regardless of what Pennsylvania's revocation statute says, and regardless of your will.

Accounts where § 6111.2 does not apply:

• Employer-sponsored 401(k) plans
• 403(b) plans
• Employer group life insurance
• Employer-sponsored defined benefit pensions
• Any other ERISA-governed plan

The U.S. Supreme Court confirmed this in Egelhoff v. Egelhoff (2001). In that case, a man died after his divorce without updating his 401(k) beneficiary designation. His ex-wife was still listed on the form. Washington state law (similar to Pennsylvania's § 6111.2) automatically revoked the ex-spouse designation — but the Supreme Court ruled that ERISA preempts state revocation statutes. The ex-wife received the entire 401(k) balance.

The takeaway is direct: if your ex-spouse is still listed as the beneficiary on your 401(k), 403(b), or employer group life insurance, they will receive those assets when you die — no matter what your will, your divorce decree, or Pennsylvania statute says.

What You Need to Update Manually

Contact each of the following and submit a new beneficiary designation form:

401(k) and 403(b) plans. Log into your employer's plan portal (Fidelity, Vanguard, Empower, TIAA) or request a paper beneficiary change form from HR. Name your new beneficiary — children, a sibling, a trust, or a new spouse.

Employer group life insurance. This is often administered separately from the retirement plan. Check with your HR department for the specific beneficiary change process.

IRAs. While IRAs are not governed by ERISA (and Pennsylvania's § 6111.2 applies to them), updating the beneficiary designation directly with the custodian is still the safest practice. Do not rely on automatic revocation alone.

Individual life insurance policies. Contact your insurance company to update the beneficiary. While § 6111.2 covers these automatically, an explicit update eliminates any dispute about the insurer's knowledge of the divorce.

Payable-on-death bank accounts and TOD brokerage accounts. Update the designated beneficiary with the financial institution directly.

The Timeline That Matters

Update your ERISA beneficiary designations within the first 30 days after the decree is entered. This is not a six-month project — every day your ex-spouse remains as the listed beneficiary on your 401(k), you are one unexpected event away from your retirement savings going to the wrong person.

If you remarry, your new spouse automatically becomes the default beneficiary on ERISA retirement accounts unless they sign a written waiver. But between your divorce and any remarriage, you must have a valid non-spouse beneficiary in place.

The Pennsylvania After-Divorce Checklist includes a beneficiary audit tracker that lists every account type, whether it is covered by Pennsylvania's automatic revocation or requires a manual update, and the specific steps for each.

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