Property Division in a South Carolina Divorce Case

Property division can be one of the most stressful parts of a South Carolina divorce.

You may be wondering:

• Who gets the house?

• What happens to retirement accounts?

• Is a business divided?

• Could you be responsible for debts that are technically in your spouse’s name?

South Carolina follows a system called equitable apportionment, sometimes referred to as equitable distribution.

That most likely means the marital portion of your assets and debts will be divided equally between you and your spouse, but not always.

In making this determination, the Family Court considers several factors when deciding how marital property should be divided.

Understanding the difference between marital and nonmarital property is one of the first steps in understanding property division in a South Carolina divorce case.

What Is Equitable Distribution in South Carolina?

Under S.C. Code Ann. § 20-3-620, the Family Court must make a final equitable apportionment of marital property when requested in a divorce or other qualifying marital action.

The word “equitable” is important.

South Carolina law does not require the court to divide every asset equally between the spouses.

Instead, the court considers the circumstances of the marriage and the financial and other contributions of each spouse before determining how the marital estate should be apportioned.

That means two divorcing couples with similar assets could potentially receive different property-division outcomes based on the facts of their individual cases.

A South Carolina Court of Appeals decision, Sharpe v. Sharpe, 307 S.C. 540, 416 S.E.2d 215 (Ct. App. 1992), illustrates this point.

In Sharpe, the court affirmed an equitable-distribution award giving the wife a 35% interest in the marital estate rather than an equal division.

The court explained that equitable distribution is within the Family Court’s discretion and upheld the division because the evidence supported the trial court’s findings.

The case also demonstrates that equitable distribution is not necessarily accomplished by simply dividing every asset down the middle.

The court upheld a payment arrangement under which the husband purchased the wife’s interest in the marital estate over time.

The court explained that the Family Court may use reasonable methods to accomplish an equitable division of marital property.

The lesson for divorcing spouses is straightforward:

South Carolina equitable distribution is not automatically a 50/50 split.

The court has flexibility in determining how the marital estate should ultimately be divided.

The specific outcome depends on the facts of the case and the statutory factors the Family Court must consider.

What Is Marital Property in South Carolina?

Generally, marital property consists of real and personal property acquired by either spouse during the marriage and owned as of the date marital litigation begins, regardless of whose name is on the title.

S.C. Code Ann. § 20-3-630 provides the statutory definition and identifies several categories of property that are generally considered nonmarital.

Marital assets can include:

• A marital home

• Other real estate

• Bank accounts

• Investment accounts

• Retirement accounts

• Vehicles

• Household furnishings

• Businesses or business interests

• Certain valuable personal property

• Other assets acquired during the marriage

An important point is that title alone does not necessarily determine whether an asset is marital property.

For example, even if an account or vehicle is titled in only one spouse’s name, it may still be considered marital property acquired during the marriage.

What Is Nonmarital Property?

Not everything owned by a spouse becomes marital property simply because the couple gets divorced.

South Carolina law generally excludes certain property from equitable apportionment, including:

• Property acquired before the marriage

• Inheritances

• Gifts from someone other than the spouse

• Property excluded by a valid written agreement

See S.C. Code Ann. § 20-3-630.

Can Nonmarital Property Become Part of the Marital Estate?

This is where things can become complicated.

A spouse may have owned a home, an investment account, a business, or another asset before getting married.

That does not necessarily mean every part of the asset will remain outside the marital estate.

For example, the value of nonmarital property may change during the marriage due to the other spouse’s efforts.

South Carolina law specifically addresses increases in the value of nonmarital property resulting directly or indirectly from the efforts of the other spouse.

Several factors can matter, including:

• The source of the asset

• How the asset was maintained

• Whether marital funds were contributed

• What each spouse did to increase or preserve its value

What Factors Does the Court Consider When Dividing Property?

South Carolina Code § 20-3-620 lists numerous factors the Family Court must consider when making an equitable apportionment.

These include:

• The length of the marriage and the ages of the spouses

• Marital misconduct or fault that affected the economic circumstances or contributed to the breakup of the marriage

• The value of the marital property

• Each spouse’s contributions to acquiring, preserving, depreciating, or increasing the value of marital property

• Each spouse’s income and earning potential

• Each spouse’s physical and emotional health

• The need for additional education or training

• Each spouse’s nonmarital property

• Vested retirement benefits

• Whether alimony has been awarded

• The desirability of awarding the family home to the spouse with custody of children

• Tax consequences

• Existing support obligations

• Liens and other encumbrances

• Marital debts

• Child custody arrangements and obligations

• Other relevant factors specifically identified by the court

This list is one reason it can be difficult to predict the outcome of a property-division dispute simply by looking at the total value of the couple’s assets.

How Are Debts Divided in a South Carolina Divorce?

Property division is not limited to assets.

Debts and other financial obligations can also become part of the overall equitable-apportionment analysis.

South Carolina Code § 20-3-620 specifically directs the court to consider liens, encumbrances, and existing debts incurred during the marriage.

Depending on the circumstances, the financial picture may include:

• Mortgage debt

• Credit card balances

• Vehicle loans

• Personal loans

• Business debt

• Tax obligations

• Other marital liabilities

It is important to distinguish between the court’s allocation of a debt between spouses and the legal obligation to the creditor.

A divorce order may assign responsibility for a debt between the spouses.

However, that does not necessarily change the terms of a contract with a third-party lender or creditor.

Who Gets the House in a South Carolina Divorce?

The marital home is often one of the largest and most emotionally significant assets in a divorce.

The Family Court can consider the desirability of awarding the family home as part of the equitable distribution.

The court may also consider allowing the spouse with custody of the children to live there for a reasonable period.

See S.C. Code Ann. § 20-3-620.

Possible solutions include:

• One spouse keeping the home and buying out the other’s interest

• Selling the home and dividing the resulting equity

• Using the home as part of a larger property settlement

There is no automatic rule that the spouse whose name is on the deed gets the house.

If you need immediate decisions about who remains in the marital home while a divorce is pending, SDH explains how Temporary Hearings in South Carolina Family Court can address issues such as possession of the marital home and vehicles.

What Happens to Retirement Accounts?

Retirement accounts can be a significant part of a couple’s marital estate.

Depending on when contributions were made and the circumstances surrounding the account, some or all of a retirement account may be subject to equitable apportionment.

The court’s analysis can also consider whether either spouse has vested retirement benefits.

See S.C. Code Ann. § 20-3-620.

Because retirement accounts can involve tax considerations and specialized division procedures, they should be identified and valued carefully before a property settlement is finalized.

What About a Business?

A business can make property division considerably more complicated.

This is particularly true when one spouse owns a:

• Closely held company

• Professional practice

• Family business

SDH already has a dedicated article titled “Dividing Business Interests in a South Carolina Divorce,” so this article does not duplicate that discussion.

Business valuation, ownership interests, each spouse’s contributions, and the business’s structure may all require more detailed analysis.

If a business is one of the major assets in your divorce, it is important to identify it early in the property-division process.

Can Marital Misconduct Affect Property Division?

It can, but such is not guaranteed.

South Carolina Code § 20-3-620 allows the court to consider marital misconduct or fault when the misconduct affected the parties’ economic circumstances or contributed to the breakup of the marriage.

There are also statutory limits concerning when certain conduct can be considered.

For example, the statute generally excludes qualifying conduct that occurs after the earliest of:

• A pendente lite order

• Formal signing of a written property or marital settlement agreement

• Entry of a permanent order of separate support and maintenance

• An order approving a property or marital settlement agreement

SDH’s article on Dating While Getting a Divorce in South Carolina discusses how adultery and other conduct can affect property division, alimony, and other parts of a divorce case.

How Is Property Division Resolved?

Not every property-division dispute has to go to trial.

South Carolina divorce cases can be resolved through:

• Negotiation

• Mediation

• Litigation

SDH explains that mediation is required in contested South Carolina divorce cases involving issues such as division of marital assets.

If spouses reach an agreement, the terms can be presented to the Family Court for approval and, when appropriate, incorporation into the final divorce order.

If the parties cannot agree, the court can decide the disputed property issues after considering the evidence in trial.

SDH’s article on Uncontested Divorce in South Carolina explains how reaching agreement on issues such as division of assets can affect the divorce process.

What Documents Should You Gather for Property Division?

Getting organized early can make the property-division process much easier.

Consider gathering:

• Recent bank statements

• Investment and retirement account statements

• Mortgage documents

• Property tax records

• Vehicle titles and loan documents

• Credit card statements

• Personal loan records

• Business financial records

• Tax returns

• Prenuptial or postnuptial agreements

• Documentation showing inheritances or gifts

• Records showing when major assets were purchased

• Documentation concerning significant improvements to property

If you believe an asset is nonmarital, documents showing when and how you acquired it can be particularly important.

What Should You Avoid Doing With Marital Property?

A divorce can create a lot of uncertainty.

Moving or selling assets without understanding the legal consequences can create additional problems.

Do not assume that you can simply:

• Empty a joint account

• Sell valuable marital property

• Transfer assets to someone else

• Intentionally conceal property

If you are concerned that your spouse may sell, transfer, hide, or otherwise dispose of marital property, speak with a South Carolina family law attorney about your options.

South Carolina law also provides mechanisms concerning property involved in marital litigation, including the ability to record a notice of pendency of action in appropriate circumstances.

See S.C. Code Ann. § 20-3-670.

How Long Does Property Division Take in a South Carolina Divorce?

There is no single timeline for property division.

An uncontested case can generally move more efficiently when both spouses agree on:

• The assets

• The debts

• The terms of the settlement

A contested divorce involving substantial assets, a business, disputed valuations, or disagreements about whether property is marital or nonmarital can take considerably longer.

SDH’s recent article, How Long Does a Divorce Take in South Carolina?, discusses how disputes over property, custody, support, and other issues can affect the overall divorce timeline.

Frequently Asked Questions About Property Division in South Carolina

Is everything divided 50/50 in a South Carolina divorce?

No.

South Carolina uses equitable apportionment rather than an automatic 50/50 division.

The Family Court considers the statutory factors in S.C. Code Ann. § 20-3-620 when deciding how marital property should be divided.

In Sharpe v. Sharpe, 307 S.C. 540, 416 S.E.2d 215 (Ct. App. 1992), the Court of Appeals affirmed a 35% equitable-distribution award to the wife.

The case illustrates that an equitable division does not necessarily mean an equal division.

The appropriate allocation depends on the facts and circumstances of the particular case.

Is property owned before marriage divided in a divorce?

Generally, property acquired before marriage is considered nonmarital property.

However, the circumstances surrounding the asset, including contributions or efforts during the marriage, can affect the analysis.

Does whose name is on the deed determine who gets the property?

Not necessarily.

South Carolina’s definition of marital property focuses on when and how property was acquired, rather than simply whose name appears on the title.

Are debts divided during a divorce?

Marital debts and other financial obligations can be considered as part of equitable apportionment.

The court can allocate responsibility between the spouses, although such an allocation does not necessarily alter a creditor’s rights under a separate contract.

Can I keep the house in a South Carolina divorce?

Possibly.

A spouse may receive the marital home as part of the overall property settlement.

However, the court considers the circumstances of the case and the home’s value, debts, custody arrangements, and other relevant factors.

Talk to a South Carolina Family Law Attorney About Property Division

Property division in a South Carolina divorce case involves more than adding up bank accounts and deciding who gets the furniture.

The court must first determine:

• What belongs in the marital estate

• What is nonmarital

• Which statutory factors govern equitable apportionment

If you are facing a divorce involving a home, retirement accounts, a business, significant debts, or other valuable property, getting legal guidance early can help you understand the issues that may need to be addressed.

Seaton, Duncan & Holmes represents clients in South Carolina family law matters, including divorce, property division, alimony, child custody, and other related issues.

Visit the firm’s South Carolina divorce law practice to learn more or contact the firm HERE to discuss your circumstances.