At such time as you file an action for divorce or separate support and maintenance, the “marital estate” is created. The marital estate consists of certain real and/or personal property, to include both assets and debts, of which the Family Court has the power to divide between the parties (so long as you properly request such property division in your pleadings). This division of property is referred to as equitable distribution.
Generally speaking, we follow a 4-step approach to dividing property in divorce/separate support and maintenance proceedings:
1) Identifying the marital property
2) Valuing the marital property
3) Apportioning the marital property
4) Distributing the marital property
Family Court only has jurisdiction to divide MARITAL property. Therefore, we must first identify what property is marital and what property is non-marital.
MARITAL PROPERTY:
Generally, any marital property (including debts) is all property which is accumulated during the marriage and does not fall within some established exception (i.e. non-marital property) Berry v. Berry, 290 S.C. 351 (Ct. App. 1986). Marital property includes:
(1) all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation as provided in Section 20-3-620 regardless of how legal title is held.
(2) enhancement/appreciation of marital assets due to efforts of either spouse during the marriage
(3) gifts between spouses during the marriage
(4) certain real properties which the parties owned jointly, even if they were acquired before the marriage.
NON-MARITAL PROPERTY:
S.C. Code Ann. § 20-3-630 (1976) delineates what property is considered to be non-marital as follows:
(1) property acquired by either party by inheritance, devise, bequest, or gift from a party other than the spouse; or
(2) property acquired by either party before the marriage and property acquired after either (a) entry of temporary order in a divorce or separate maintenance action, (b) formal signing of a written property or marital settlement agreement, or (c) the entry of a permanent order of separate maintenance/permanent order approving a property or marital settlement agreement between the parties; whichever occurs sooner; or
(3) property acquired by either party in exchange for the property in provision (1) and (2) above; or
(4) property excluded by written contract of the parties. (i.e antenuptial/”pre”nuptial agreements); or
(5) any increase in value in non-marital property, except to the extent that the increase resulted directly or indirectly from efforts of the other spouse during marriage.
The Family Court has no jurisdiction to make apportionments of non-marital property.
TRANSMUTATION
It is important to note that non-marital property can become marital property through a process called “transmutation.” Generally, the court will look to the intent of the parties with regard to the disputed property, and the party claiming transmutation has the burden of proving that non-marital property has, in fact, become marital property.
The marital home is often subject to transmutation arguments. For example, a home purchased by one party prior to marriage may become transmuted into marital property in circumstances where marital funds are used to discharge the debt related to the previously non-marital property. Likewise, a spouse may help secure a loan or note on their spouses non-marital property and become jointly liable for such debt. In such circumstances, the property may become transmuted into marital property. Other types of non-marital property (i.e. pensions, retirement funds, etc.) may also become transmuted. Normally, this occurs when otherwise non-marital portions of such accounts are commingled with marital portions of the account.
ABSENT AN AGREEMENT BETWEEN THE SPOUSES, THE FAMILY COURT WILL ENDEAVOR TO MAKE AN EQUITABLE DIVISION OF MARITAL ASSETS AND DEBTS BETWEEN THE PARTIES.
EQUITABLE APPORTIONMENT FACTORS:
When making a determination as to how to equitably apportion marital assets and debts, judges will look to the EQUITABLE APPORTIONEMENT FACTORS as delineated in S.C. Code Ann. § 20-3-620(B) (1976) as follows:
In making apportionment, the court must give weight in such proportion as it finds appropriate to all of the following factors:
(1) the duration of the marriage and the ages of the parties at the time they married as well as when they initiated the 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; provided, no such conduct will be considered if the conduct shall have taken place subsequent to the happening of the earliest of:
(a) entry of a temporary order in a divorce or separate maintenance action;or
(b) formal signing of a written property or marital settlement agreement; or
(c) entry of a permanent order of separate maintenance and support or of a permanent order approving a property or marital settlement agreement between the parties.
(3) the value of the marital property, to include the contribution of each spouse to the acquisition, preservation, depreciation, or appreciation in value of the marital property.
(4) the income of each spouse, the earning potential of each spouse, and the opportunity for future acquisition of capital assets;
(5) the health, both physical and emotional, of each spouse;
(6) the need of each spouse or either spouse for additional training or education in order to achieve their income potential;
(7) the non-marital property of each spouse;
(8) the existence or nonexistence of vested retirement benefits for each or either spouse;
(9) whether separate maintenance or alimony has been awarded;
(10) the desirability of awarding the family home as part of equitable distribution or the right to live therein for reasonable periods to the spouse having custody of any children;
(11) the tax consequences to each or either party as a result of any particular form of equitable apportionment;
(12) the existence and extent of any support obligations, from a prior marriage or for any other reason or reasons, of either party;
(13) 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;
(14) child custody arrangements and obligations at the time of the entry of the order; and
(15) such other relevant factors as the trial court shall expressly enumerate in its order.
If you wish to speak with someone regarding issues or questions related to the division of assets and/or debts as a result of the dissolution of your marriage, please do not hesitate to contact the Law Office of J. Wyatt Wimberly, LLC today for a consultation to discuss the best option to help you move forward.