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South Carolina Property Division
Property Distribution Laws in South Carolina

In South Carolina the courts generally accept a fair and reasonable property division the parties agree to, but if the parties cannot agree, the Family Court divides the property within the Judgment of Divorce.

Equitable division, or “equitable apportionment” in South Carolina law, means that the court divides property equitably. South Carolina is dual classification state. The appreciation of separate property is separate property.

The judge decides what’s equitable, or fair, based on the complete picture of the marriage’s financial health and what each spouse needs to move forward after divorce. Equitable does not mean equal, or even half, but rather what the Family Court considers fair.

When the parties are unable to reach a settlement, the Family Court distributes the marital assets between the two parties in an equitable fashion.

Factors in Equitable Distribution

Following the Code of Laws for South Carolina - Chapter 3; 20-7-472, 20-7-473, family court considers:

  • the length of the marriage;
  • the age of the spouses;
  • marital fault or misconduct;
  • the current value of the property;
  • the contribution each spouse made to the acquisition of the property;
  • the income of each spouse;
  • the earning potential of each spouse;
  • the health of each spouse;
  • the need of each spouse;
  • the separate property of each spouse;
  • the retirement benefits of each spouse;
  • the tax consequences;
  • the expenses and debts of each spouse;
  • the custody arrangement if children are involved; and
  • any other relevant factors.

All the marital property must be divided when the marriage ends, so the court needs to know which property belongs to the marriage. This includes both the marital property and the non-marital property.

Credit card debt or poor investments with marital funds during marriage may create debt that belongs to the marriage and both spouses may be held responsible for a part of it.

Financial misbehavior – for example, habitual gambling – may be a factor in the division of property.

Marital Property vs. Separate Property

Marital property is property acquired or earned during the marriage, regardless of title. Property used for the benefit of the marriage or shared with the other spouse, even if it began as separate property, may become marital property.

Generally, separate property is property that either belonged only to one spouse before marriage or was acquired after the filing for divorce. Among other things, it could include some property given only to one spouse during the marriage.

In South Carolina, separate property remains the property of the spouse who owned it before or during the marriage.

Property Defined

Property is either marital or separate, and it includes assets and liabilities. The most common types of property divided at divorce are real property like the family home, personal property like jewelry, and intangible property like income, dividends, and benefits. All debts must be divided as well.

Valuing and Dividing Property

Put simply, the court classifies assets and liabilities, property and debt, as marital or separate. Then it assigns a monetary value to the marital property and debt. Finally it distributes the marital assets between the two parties in equitable manner.

Once all the property is valued, the court divides it based on a number of factors, including each spouse’s monetary contributions to property (other than non-marital property) and appreciation in the value of the property, income, and the use of non-marital funds for the benefit of the marriage. Homemaking, child-care services, and other unpaid work are a non-monetary contribution.

The court looks at the quality of these contributions, not just their existence. The length of the marriage, the ages and health of each spouse, the amount of non-marital property, and any fault that may have affected marital resources - all are considered. Additional factors include each spouse’s need for additional education or training, retirement benefits, debts or liens on property, any alimony due, and tax consequences.

The Marital Home

The court is more likely to award a spouse the family home if there are children of the marriage living there most of the time.

In South Carolina, as in many jurisdictions, the equity in the marital home is often one of the biggest assets the spouses divide. The equity is the market value of the house, less any debts or liens against it. Equity is established by determining what the current market value of the home is at the time of separation. Once the spouses agree to a current market value, any debts associated with the property (mortgage, taxes, home equity loans, etc.) are deducted from the market value to arrive at the equity to be divided. Normally, making this calculation requires a paid real estate appraisal or a real estate agent can prepare a market analysis for free.

From there, couples choose one of three options to divide the equity:

  • The spouses sell the home and divide the proceeds.
  • One of the parties may refinance the home and “buy out” the other party.
  • One spouse (usually the custodial parent) remains in the home with the exclusive use and possession for a certain period of time (for example, until the youngest child graduates from high school), then either buys out the other spouse or sells the home and divides the proceeds.

Pensions and Retirement Accounts

In South Carolina vested pensions are marital property. A pension vests when all the requirements to receive the pension have been met. Unvested pensions are also marital property. Until the pension has vested, the person under whom the pension is maintained has only an expectancy of interest in the pension.

Several different methods of valuation are used in determining how much a marital asset is worth, depending upon the asset to be valued and the level of agreement between the parties. Courts generally accept the value when the spouses mutually agree on a value of a particular asset. Experts may be retained by the parties or by the courts to determine the value of marital assets if the parties cannot agree. Such experts may include accountants, real estate or business appraisers, or pension valuators. The use of experts adds to the cost of the divorce.

In South Carolina the court may include the retirement benefits and plans earned by both spouses as marital assets available for division. Retirement benefits vary greatly but can generally be divided into two groups:

  • Defined Contribution Plans: A defined amount of money belonging to the employee. The employee and/or the employer make defined contributions. The balance of the plan is constantly changing, but its value is definable at any given point. 401(k)’s, 403(b)’s and profit sharing plans fall into this category.
  • Defined Benefit Plans: A retirement benefit where an employer promises to pay a benefit to an employee sometime in the future, based upon some type of formula. Normally, this formula is based on the employee’s salary near the end of his or her career and the number of years he or she worked for the employer before retirement. Defined benefit plans are much more complicated to value and often require the professional evaluation of an actuary to determine exact values.

In South Carolina if spouses share in each other’s retirement or pension plan, a Qualified Domestic Relations Order must be completed. A QDRO is a written set of instructions that explains to a plan administrator that two parties are dividing pension benefits. The instructions set forth the terms and conditions of the distribution - how much of the benefits are to be paid to each party, when such benefits can be paid, how such benefits should be paid, etc.

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