Assisting clients in the division of debts and assets in York, Lancaster, and Chester Counties
The division of debts and assets is a critical component of any divorce proceeding. If the divorce is uncontested, and both parties can agree to a fair and reasonable split of the property, it is not uncommon for a court to simply review and approve the agreement. However, if the divorce is contested, it is the court that will make the decision as to which spouse receives which property.
If you are about to begin a divorce action, there is a lot at stake and the anxiety and stress you may be feeling is completely normal. To reduce some of this stress, you need competent and experienced legal representation. Call Holland Law in Rock Hill or Fort Mill, and reserve a consultation with an experienced property division lawyer today.
Is South Carolina an equitable distribution state?
South Carolina is an equitable distribution state when it comes to how property is divided during a divorce. At its core, the idea is to split all marital property in a fair manner. This does not necessarily mean a true 50/50 split, however. All it ensures is that the splits will be equitable and just.
Section 20-3-630 of the South Carolina Code of Laws sets out the definitions of property subject to equitable distribution, and the factors the court considers when determining what will be split.
Factors that determine asset and debt division
The assets owned by you and your spouse took time to acquire. You may have a primary residence, vacation home, furnishings, vehicles, valuables, watercraft, businesses, retirement accounts, and even cemetery plots that all need to be split fairly, so that you each leave the marriage with an appropriate share. The division of property is determined by factors the court weighs against the evidence each party provides. South Carolina apportions debts in the same way.
The court considers a minimum of 17 factors, set out by statute:
- Length of the marriage
- Marital fault or misconduct
- Age of the spouses
- Existence and/or approval of a temporary order
- Existence and/or approval of a valid property or marital settlement agreement
- Current value of the property
- Income of each spouse
- Physical and emotional health of each spouse
- Need for each spouse to receive training or education to realize his/her income potential
- Nonmarital property of each spouse
- Retirement benefits of each spouse
- Awards for separate maintenance or alimony
- Want or need of marital home being awarded
- Tax consequences to each party for a particular form of property
- Other support obligations from a prior marriage
- Liens, encumbrances, and debts of each spouse
- Any applicable child custody arrangement
If you have questions about how certain property might be categorized, schedule a consultation at my office in Rock Hill or in Fort Mill, to learn how divorce might affect your financial position.
What is considered property for purposes of divorce?
South Carolina has two categorizations for property: marital and nonmarital. Without a premarital or postmarital agreement designating what you each receive in the event of a divorce, you will need to find common ground to work out a settlement during mediation or be at the mercy of a judge, who will look at the bottom line rather than any sentimental value an item holds.
Marital property in South Carolina
Marital property is property that was acquired during your marriage with marital funds. The idea is that since you were married at the time, you both contributed to the acquisition, preservation, depreciation, or appreciation in value of that property. Contributions don't only come from earning an actual paycheck; the court considers the contribution of the spouse as homemaker to be on equal footing to working outside the home in many cases.
In South Carolina, the family court only has jurisdiction to divide marital property and marital debt, regardless of how title is held.
A word about retirement accounts
South Carolina considers pensions and benefits, in addition to 401(k)s, IRAs, bonuses, bank accounts, commissions, and tax refunds, to be marital property subject to division. However, if the accounts were in existence prior to the marriage, that portion may be treated as non-marital property.
Non-marital property in South Carolina
Nonmarital property is property that was owned before marriage, was acquired by inheritance or gift from a third party, or after the date of filing your pleadings in family court. Once you have filed an action for separate support and maintenance or for divorce, it shuts the window on future assets being classified as marital, and therefore they won't be subject to division. However, you cannot take money from a joint bank account to make purchases that will be classified as “non marital” once you file the action. If marital property was used to make a new purchase after the filing of pleadings, that purchase is still marital property.
What about my engagement ring?
While there are no guarantees, South Carolina courts tend to side with the spouse who accepted the proposal and went through with the marriage. The courts often view an engagement ring as consideration for accepting a marriage proposal. Once the marriage takes place, the contract is fulfilled, and the engagement ring becomes the premarital property of the bride.
Complications related to property distribution
Although there are specific criteria considered in awarding certain property to each spouse, unexpected complications can arise. A well-crafted strategy by an experienced divorce attorney may minimize the financial impact you could experience. Often the court will implement a mutual restraining order preventing the parties from selling, destroying, encumbering, or otherwise diminishing the value of the marital estate. There may be steps that you can take before filing for divorce that will better position you, financially.
Can my spouse get any of my nonmarital property?
Although property acquired by one spouse prior to marriage is typically classified as nonmarital, when that property is used for the benefit of the marriage, it may be considered marital property subject to property division.
Transmutation is the process by which nonmarital property becomes transformed into marital property when a party proves that both spouses considered and treated it as marital. This can happen through jointly titling the property, or by commingling it with marital property to the point that the original contribution can no longer be traced.
Common examples or transmutation and commingling include:
- Spouse A selling his home to move into the premarital home of Spouse B
- Spouse A deposits funds from a trust account (or other separate account) into a joint marital fund
- Spouse A gifts assets or properties to Spouse B
- Spouse A works for free at Spouse B's business
If you have used nonmarital property during your marriage, you need a qualified family law attorney with the experience to advise you on handling of this complicated legal concept.
Who gets the house in a divorce?
It is no secret that in most cases, the equity in the marital home is the biggest and most important asset that must be divided in a divorce action. Equity is simply the value of the home against any mortgage, debt, and/or lien. To determine the actual value of the home, an official appraisal is usually needed.
From there, couples choose one of three options to divide the equity:
- Sell the home
- Refinance the home and pay off the other spouse
- One spouse is permitted to remain in the home for a set period of time and then either pays out the other spouse or sells the home with the purpose of dividing up any proceeds
The court is more likely to award the home – if it does not need to be sold – to the spouse with custody of the children. However, if the value of the home is contested, judges often require the home to be sold, because the true value of something is what another is willing to pay for it.
Fighting for a fair outcome in Rock Hill and Fort Mill divorces
Coming to the realization that your marriage has ended is only made more difficult by the reality that your possessions and financial stability may be cut in half. If you or someone you love is considering divorce, reach out to Holland Law today to see how I can help make the process smoother and less traumatic. To schedule your consultation in either my Fort Mill office on Gold Hill Road, or in my Rock Hill office on Oakland Avenue, call 803-590-8170 or tell me your story through my contact page. Holland Law proudly serves clients in and around York, Chester, and Lancaster Counties.