South Carolina Equitable Distribution
Equitable Apportionment of Marital Property
If you do not have a prenuptial agreement, South Carolina’s Equitable Apportionment of Marital Property (Article 5, NC § 20-3-610) laws will be applied to determine how the property will be divided between you and your spouse. The process is commonly referred to as South Carolina Equitable Distribution.
The court will make a final equitable apportionment of a divorcing couples’ marital property upon the request of either party to the divorce. Equitable is a fancy, legal way of saying fair. Apportionment simply means to divide. The SC Judge hearing your divorce case, will fairly divide your marital property and debt. This is South Carolina Equitable Distribution.
During the marriage, each spouse acquires a vested special equity and ownership right in the marital property as defined in SC § 20-3-620.
What is Marital Property in South Carolina?
For purposes of South Carolina Equitable Distribution, marital property is all the property owned by the couple that cannot rightfully be classified as non-marital property and includes:
- 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 regardless of how title is held except property specifically excluded as non-marital property.
- Inter-spousal gifts of property, including gifts of property from one spouse to the other made indirectly by way of a third party, are marital property which is subject to division.
What is Non-Marital Property in South Carolina?
As part of Equitable Distribution in South Carolina, the court must determine what property is non-marital. Under SC § 20-3-630, non-marital property includes the following, subject to limitations or exceptions created by comingling of non-martial property with marital property. Comingling of non-marital property can transmute, or change it into marital property.
- Gifts from someone other than the spouse
- Inheritances and bequests
- Property acquired by either party prior to the marriage
- Property acquired by either party after the court issues a pendent lite order in a divorce or separate maintenance action
- Property acquired after the formal signing of a written property or marital settlement agreement
- Property acquired after a permanent order of separate maintenance and support or a permanent order approving a property or marital settlement agreement between the parties.
- Property acquired by either party in exchange for property described above.
- Transfer payments – payments of obligations to one party where the entire transfer payment was earned prior to the marriage. For example, a disabled veteran who married his or her spouse after the disability was known and after the veteran was retired from the service as the result of the disability.
- Payments for pain and suffering in personal injury lawsuits.
- Any increase in value in non-marital property during the marriage, except to the extent that the increase resulted directly or indirectly from efforts of the other spouse during marriage.
- Property excluded by written contract of the parties. “Written contract” includes any prenuptial agreement of the parties which must be considered presumptively fair and equitable so long as it was voluntarily executed with both parties separately represented by counsel and pursuant to the full financial disclosure to each other that is mandated by the rules of the family court as to income, debts, and assets.
The court does not have jurisdiction or authority to apportion non-marital property.
What Factors do Courts Consider in Determining SC Equitable Distribution?
The court will determine how much weight it feels it should give to each of the following factors based on the specific circumstances involved in the South Carolina divorce proceedings:
- How long was the marriage?
- What were the ages of each spouse at the time of the marriage?
- What are the ages of each spouse at the time of the divorce?
- Was one or both parties involved in marital misconduct? Misconduct and fault are considered even if the divorce is based on a 1-year separation.
- Did the misconduct, if any, affect the economic circumstances of either party?
- Did the misconduct, if any, contribute to the breakup of the marriage?
- Did the misconduct referenced above occur before:
- The formal signing of a written property or marital settlement agreement, or
- 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?
Additional Factors in South Carolina Equitable Distribution:
- The value of the marital property in South Carolina and elsewhere.
- 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; provided, that the court shall consider the quality of the contribution as well as its factual existence.
- The income of each spouse.
- The earning potential of each spouse.
- The opportunity for future acquisition of capital assets.
- The physical health of each spouse.
- The emotional health of each spouse.
- The need of each spouse or either spouse for additional training or education in order to achieve that spouse’s income potential.
- The non-marital property of each spouse.
- The existence or non-existence of vested retirement benefits for each or either spouse.
- Whether separate maintenance or alimony has been awarded.
- 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.
- The tax consequences to each or either party as a result of any particular form of equitable apportionment.
- The existence and extent of any support obligations, from a prior marriage or for any other reason or reasons, of either party.
- 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.
- Child custody arrangements and obligations at the time of the entry of the order, and
- Other relevant factors the trial court shall expressly enumerate in its order.
The court’s order for distribution of marital property shall be a final order and not subject to modification except by appeal or remand following proper appeal.
Given the unknowns and leeway the court has to weigh different factors in ways that benefit one party over another in unforeseeable ways, the wisdom of writing your own property settlement rules in a prenuptial agreement becomes apparent.
The court may order the public or private sale of all or any portion of the marital property upon terms it determines as part of making equitable distribution in South Carolina.
Are there Alternatives to Equitable Distribution in South Carolina?
If a couple is able, through personal negotiation or mediation, to reach agreement about property settlement for all or a portion of their marital assets, the court will only apply equitable distribution to any portion where agreement was not achieved.
The court will have to sign off on the negotiated distribution agreement because they have an interest in ensuring it is fair and does not favor one spouse unequally. If you want to have an unequal distribution, making sure the spouse who is receiving less is represented by a Family Law attorney will increase the court’s willingness to approve an unequal distribution.
An Honest Accounting
Providing an honest accounting of all assets, income, and debts is required. If you attempt to hide assets or income and the court learns about it, your dishonesty can be an “other relevant factor” considered by the court in determining South Carolina equitable property distribution and alimony or separate maintenance payments.
While many people consider a prenuptial agreement an indication that a couple is considering divorce or doesn’t trust one another, there is a more practical way to view a prenup.
If someone dies without writing a Will, they are considered to have died intestate
(without a Will) and the Will the state wrote for every resident of the state is applied to determine the distribution of their property. Everyone has a Will—some people have the default one the state wrote for them, which may or may not represent their wishes. Writing a Will replaces the Will your state wrote with one that more fully reflects your personal wishes.
In much the same way, every state has laws that determine how marital assets will be divided in the event of a divorce. A prenuptial agreement simply replaces the property division laws of the state with ones that more fully reflect the personal wishes of the couple. In a world where families are more mobile than ever and may not know which states they might live in during the course of their marriage, a prenuptial agreement is the only way to maintain consistency in the division of property that would occur if there is a divorce. A prenuptial agreement is a basic risk management strategy.
If you have a prenuptial agreement, it will be the controlling document that directs the division of marital and non-marital property when there is a divorce.
Divorces are complex legal matters that can affect your income and assets for a long time. Having a professional Family Law attorney on your side to help you avoid pitfalls can help you achieve the best possible result from your divorce and property settlement agreement.