Dividing up marital property: what’s not on the table?

All property acquired during a marriage in South Carolina is considered the property of both parties, except…

The term “property” in South Carolina domestic relations law does not simply refer to the house, sofa, kitchen utensils and automobiles. It also refers to retirement accounts, cash and investment accounts, and businesses.  Property that was not acquired during the marriage, or was gifted to, or inherited by, one party during the marriage, will almost always not be marital property.

But sometimes it is not so simple. Property that is not technically marital may be transformed (or in legalese “transmuted”), into marital property if the court determines that the parties intended as such.  The courts will look to all facts and circumstances such as how the property was titled, how it was used during the marriage, who acquired it, the contribution of each party to the maintenance and appreciation of the property, etc. 

I recently had a case involving a small business. Husband’s business had been in existence for over 30 years, but the marriage was only for 17 years.  During the marriage wife worked as the bookkeeper, the business was titled to her and the property of the business (a “paid for” boat) was titled to the business. The business was the sole source of income for the family. As such the business and boat were “transmuted” or transformed from separate, pre-marital property to marital property.

In order to preserve the non marital status of separate property, it is important to make sure and do the following:

  • Keep separate property titled separately
  • Do not co-mingle separate property with marital property, such as a banking or investment account.
  • Do not use separate property as the sole source of support for the family, if at all possible.
  • Execute a Prenuptial or Postnuptial Agreement.

If you are careful with your separate property and prevent it from being titled jointly or commingled with other marital property, you should have a good chance to keep it out of equitable apportionment analysis.

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