What Happens When Your Spouse Dies During a Divorce?

Making the difficult decision to end a marriage is always fraught with heavy emotions: anger, anxiety over your future, and even some relief. And when your spouse dies before your divorce is finalized, these emotions are only made more complex. You may have questions about the division of your assets, or whether you have any claim on your spouse's pension or Social Security funds.

Read on to learn more about what happens when your spouse dies during a divorce, as well as what a recent court decision could mean for the distribution of your marital funds.

What happens to your divorce case when your spouse dies?

If you and your spouse were simply discussing divorce before his or her death, without any formal legal action taken, your case won't be treated as a divorce—rather, it will be a probate action. Under the laws of most states, you will be entitled to your spouse's share of assets, unless you had a prenuptial agreement or he or she had a will that provided for certain assets to be distributed to other heirs.

However, if you've already filed for divorce or legal separation, your case becomes more complicated. Some states will simply dismiss the divorce case and send the matter to probate court, while others will attempt to first divide the marital assets between you and your deceased spouse, then distribute your spouse's assets to his or her heirs. A representative may be appointed to advocate for your spouse's legal and financial interests during the divorce, and your spouse's family members may also become involved in the process.

What recent court decisions could change the way estates are handled in these situations?

One of the most crucial parts of the divorce process is the QDRO -- qualified domestic relations order. This document sets out a comprehensive list of marital assets and debts and how they are to be divided. Unless you and your spouse had all your assets in cash, the division of assets can be a complex process, as some items (like homes, jewelry, and antiques) aren't easily valued or liquidated, while others (like retirement accounts) could be subject to a penalty if withdrawn and divided before your retirement.

As a result, QDROs often provide not only for current assets, but future assets. For example, if your spouse has a pension, your QDRO may grant you a portion of this amount, even if your spouse wouldn't have begun to collect the pension for years or decades after your divorce. If you would like to retain your home, but can't afford to buy your spouse out, your QDRO could create an "IOU" requiring you to repay your spouse (with interest) after a certain number of years.

Recently, the Second Circuit federal court made a decision that could make the process of dividing assets easier when one spouse dies while divorcing. This ruling held that QDROs negotiated and entered after the death of one divorcing spouse remained legally valid and enforceable. This means that you should be able to proceed with your divorce and the division of assets without concern that one of your spouse's family members or other potential heirs will attempt to intervene in the process. However, your spouse's interests will still need to be represented, either by an attorney or appointed personal representative.

Your attorney will likely negotiate with your spouse's attorney to reach a fair settlement. If there are any factors that weigh in your favor—for example, if you were the higher earner during your marriage, or your spouse had an addiction or spending problem—you may be able to argue in favor of receiving a greater share of the marital estate. However, you won't be entitled to the full amount of marital assets simply because your spouse passed away before the divorce was granted. It's important to consult with an attorney who is experienced in QDROs of all varieties, including those negotiated and executed after death.

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