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.