In South Carolina, the Family Court is vested with the power to divide
the marital property of parties who are seeking to divorce. You may be
wondering, what exactly is marital property? Well, South Carolina generally
defines marital property as all real and personal property which has been
acquired by the parties during the marriage and which exists on the date
you file for a divorce. This property includes homes, bank accounts, cars,
jet skis, jewelry, pensions, 401(k) plans, IRAs, businesses and all property
of any kind. It does not matter if the legal title is solely in the name
of one spouse. If it was acquired during the marriage, it is subject to
being divided by the Court.
However, there are some important exceptions to this general definition
of marital property. First, marital property generally doesn’t include
property acquired before the marriage. Gifts from third parties or property
acquired by inheritance are also generally not included. The caveat is
that if you have non-marital property and demonstrate an intent to make
it marital, a Court may determine that you have transformed it into martial
property, making it subject to division during a divorce. A good example
of this is when someone owns a home prior to getting married and then
places their spouse on the deed and mortgage after they marry that spouse.
The act of placing title to the home in both spouses’ names and
allowing both spouses to share in the liability of the mortgage debt is
generally seen as an intent to transform that non-marital property into
marital property that is subject to being divided by the Court.
If you are seeking to protect non-marital property from being divided during
a divorce, it is important to keep it strictly separate and apart from
the rest of your marital assets. If you inherit $10,000.00 from a relative,
keep it in a separate bank account apart from any joint accounts or other
accounts used for general day-to-day expenses during the marriage. If
you own a home prior to getting married, keep the title solely in your
name. If you are worried about your 401(k), make sure you keep statements
from around the time of marriage to keep track of the non-marital value
and don’t roll it over into investment vehicles titled jointly between
you and your spouse.
You can use non-martial property to acquire property in the marriage that
may still be considered non-marital, but you will need be able to trace
it directly to the non-marital property. For example, if you used $10,000.00
you inherited from a relative to buy a car or a motorcycle, that car or
motorcycle will still be considered non-marital and not subject to division
in a divorce. However, you must be careful not to comingle the non-marital
funds used to purchase that item with marital funds prior to making the purchase.
Finally, you may be wondering what happens to property after you file for
divorce but before the case ends. Well, generally anything you acquire
after the case begins is considered non-marital property. However, for
assets like homes and retirement accounts, increases or decreases in value
are generally still considered marital if the change in value was due
to passive appreciation or depreciation. This means if your 401(k) that
you earned during your marriage gains 10% due to a rise in the stock market
after the date you file for divorce, that 10% rise in value is still subject
to division. If it rises 10% because you put more money in from your paycheck
after you filed for divorce, that 10% is not generally subject to division.
If you have any questions about how any of this applies to your circumstances,
please give Bob Jackman a call at 803-765-2935 to set up a consult today.