What is Marital Property in South Carolina?
In South Carolina, the family court views marriages, in part, as an “economic partnership” that must be divided when you divorce. To divide marital property, the family court first decides what property is, in fact, marital. Then, the family court places a value (fixed at the date either party filed in family court) on both marital and non-marital property. Lastly, the family court divides the marital property between the spouses based on several factors.
Martial property usually includes anything that was acquired by either spouse during the marriage, up until the date of filing in family court, such as:
- cash on hand
- money in checking, savings, and other financial accounts
- retirement or pension funds
- life insurance cash value
- stocks and bonds
- real estate
- motor vehicles and boats
- jewelry (excluding the engagement ring which is a non-marital gift)
- household contents; and
- any other property of value
For purposes of whether property is marital, it doesn’t matter whose name the property is titled in, such as a home. Anything acquired after a party files in family court is typically not considered marital property.
Some property acquired during the marriage may be non-marital. For example, if a spouse acquires property through an inheritance or gift from someone other than their spouse, that property isn’t marital. Pre-marital property swapped for other property isn’t marital. A pre-nuptual agreement may specify that certain property is non-marital. Lastly, increases in the value of non-marital property is non-marital unless the property increased in value because of the efforts of the other spouse during the marriage such as helping to repair a run-down, non-marital home.
What is Non-Marital Property?
In addition to inherited property and gifts from third persons, property that was acquired before the marriage is typically non-marital. Also, property acquired after filing in family court isn’t marital property unless it was acquired by exchanging marital property.
Depending on the circumstances, sometimes non-marital property may become marital or otherwise be subject to valuation by the family court when there is commingling, transmutation, or the creation of a special equity.
1) Commingling of Non-Marital Property
When marital and non-marital property are commingled (mixed together) in a way that makes it impossible to decide what is marital or non-marital, all of the property becomes marital. A classic example of commingling is when the couple deposits their martial funds from paychecks, etc. into a financial account that belonged to a party prior to the marriage..
2) Transmutation of Non-Marital Property
If the parties show a clear intent to treat non-marital property as marital, then this property “transmutes” into marital property. A classic example of transmutation is when one party owns a home prior to the marriage, but both parties live there during the marriage and both pay the mortgage.
3) Special Equity in Non-Marital Property
The family court can award a spouse a “special equity interest” in non-martial property even if the property hasn’t been transmuted. A special equity interest is created when one spouse’s direct or indirect contributions increased the value of the other spouse’s non-marital property. A classic example of a special equity interest is when one spouse repairs or maintains the other spouse’s inherited property.
How Does the Family Court Value Property?
After the family court identifies both marital and non-marital property, it must then place a value on both types of property. The reason the family court values non-marital property is because the value is one of many factors the court considers in dividing marital property and in awarding alimony. The court values of both types of property as of the date of filing in family court. However, the court has the discretion to consider both parties’ contributions to any post-filing increase or decrease in value. As for proof of value, the court can consider the parties’ own opinions, witness testimony, and experts’ opinions.
How Does the Family Court Divide Marital Property?
After the family court has identified marital and non-martial and the values for each, the court must equitably divide the marital property. There is no mathematical formula by which the family court decides how to divide marital property. Instead, the family court makes it’s decision on a case-by-case basis considering the following factors:
(1) the duration of the marriage together with the ages of the parties at the time of the marriage and at the time of the family court action
(2) marital misconduct or fault of either or both parties, whether or not used as a basis for a divorce as such, if the misconduct affects or has affected the economic circumstances of the parties, or contributed to the breakup of the marriage;
(3) the value of the marital property, whether the property be within or without the State.
(4) the contribution (and the quality of the contribution) of each spouse to the acquisition, preservation, depreciation, or appreciation in value of the marital property, including the contribution of the spouse as homemaker;
(5) the income of each spouse, the earning potential of each spouse, and the opportunity for future acquisition of capital assets;
(6) the health, both physical and emotional, of each spouse;
(7) the need of each spouse or either spouse for additional training or education in order to achieve that spouse’s income potential;
(8) the non-marital property of each spouse;
(9) the existence or nonexistence of vested retirement benefits for each or either spouse;
(10) whether separate maintenance or alimony has been awarded;
(11) the desirability of awarding the family home as part of equitable distribution or the right to live there for reasonable periods to the spouse having custody of any children;
(12) the tax consequences to each or either party as a result of any particular form of equitable apportionment;
(13) the existence and extent of any support obligations, from a prior marriage or for any other reason or reasons, of either party;
(14) liens and any other encumbrances upon the marital property, which themselves must be equitably divided, or upon the separate property of either of the parties, and any other existing debts incurred by the parties or either of them during the course of the marriage;
(15) child custody arrangements and obligations at the time of the entry of the order; and
(16) such other relevant factors as the trial court shall expressly enumerate in its order.
Typically, the longer the marriage, the more likely the court will divide assets 50/50. Essentially, the longer the marriage, the more likely that both parties divided their responsibilities in a way that they believed was fair and so both spouses should enjoy the economic benefits of their marital “partnership” equally. In a shorter marriage, the family court is more likely to look closer at the parties’ contributions to the marriage before dividing property.
If there are third persons or entities that have an ownership interest in property (such as partners in a business that is partially owned by a spouse), then the family court has the power to add these third parties to the lawsuit to accomplish equitable division of that property.
In the end, if the property can’t be divided by giving each spouse “like kind” assets then the family court may order that assets be liquidated (sold) and the proceeds divided between the parties.
How Does the Family Court Divide Marital Debts?
In addition to dividing marital property, the family court also divides marital debts considering the same factors as listed earlier in this section. However, just because the family court divides assets in a particular percentage, such as 50/50, doesn’t mean the family court will divide debts in the same percentage. Typically, the spouse who has greater income will be responsible for a larger portion of the marital debts than the other spouse.
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