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Family Law Bar Prep

What is Marital Property?

Equitable apportionment is the division of property and other assets at a couple's divorce. Generally, courts attempt to allocate property evenly between the parties, but occasionally the circumstances of the case will require a different distribution. 

  Husband Wife
Property-->                50%                   50%                  
Car--> 50% 50%
Furniture --> 50% 50%
401K--> 50% 50%

 

If the property cannot be divided, then one spouse may pay an amount equal to half the property's value. 

20-3-610 Factors

During the marriage a spouse shall acquire, based upon the factors set out in Section 20-3-620, a vested special equity and ownership right in the marital property as defined in Section 20-3-630. Which equity and ownership right are subject to apportionment between the spouses by the family courts of this State at the time marital litigation is filed or commenced as provided in Section 20-3-620. Marital property is coming into being at the time of the commencement of the litigation. Some things are excluded from marital property. 

In a proceeding for a divorce a vinculo matrimonii or separate support and maintenance... once which dissolves and totally severs the marriage tie. The court shall make a final equitable apportionment between the parties of the marital property. Sometimes if equitable apportionment is not plead, it cannot be later decided. ONLY MARITAL PROPERTY can be considered for equitable apportionment. 

Equitable Distribution Objectives: 

  • Sever all joint interests in property as completely as possible, at the time of entry of judgment of divorce
  • Complete division so that disputes and irritants do not linger and present further incentives to litigation
  • Dissolve the marriage, sever all entangling legal relations, and place the parties in a position from which they can begin anew. 

Equitable Apportionment is NOT alimony. If alimony is barred, equitable apportionment cannot be changed for compensation. These property transfers are not taxable. Property is divided regardless of title- a joint tenancy will automatically be severed in a divorce decree, unless one spouse wishes to pay the half value. REMEMBER: the family court cannot adjudicate if not plead. A family court order can be modified only when jurisdiction is specifically reserved in the decree or is allowed by statute. 

The death of one of the parties to a divorce proceeding does not affect the jurisdiction of the court to equitably apportion marital property as long as the litigation was initiated before the parties death. 

Although alimony may be secured by life insurance, equitable distribution... 

Equitable Apportionment

The following information on this page comes from the SC Code and the Stuckey book. This information is condensed for exam preparation. 

 

Steps for Property Case Equitable Apportionment: 

1. Identify and characterize each asset and debt as marital or separate: list the assets and debt, find/ trace missing assets, discovery is an important tool in this process. 

2. Value each marital asset

3. Apportion marital assets or divide debts after determining the proportionate contributions of the parties

Transmutation

Transmutation occurs when nonmarital property is turned into marital property by the actions of the parties. The first thing that the court would look to in determining if property has been transmuted is intent by circumstantial evidence. Property that is non-marital was acquired before the start of the marriage. Marital property is property that was acquired during the marriage. 

Transmutation can occur of personal property, real property, or even funds. Transmutation of funds occurs if non-marital funds do not maintain the character of being non-marital. This can be seen by whether or not the funds exist in separate or joint accounts. Income is going to be considered marital, but non-marital funds could be for example, rent collected on a non-marital property or a 401K funds that were saved before the marriage. 

See Pittman v. Pittman, 717 S.E.2d 88 (2014). 

Dividing Assets

When the court apportions property: 
 
- Property is divided regardless of title.
- A divorce decree will automatically sever any joint tenancy in real estate held by husband and wife with no other tenants and become a tenancy in common (unless the decree says otherwise). There is no right of survivorship.
- Only property that is plead can be divided.
- The death of one of the parties to a divorce proceeding does not affect the jurisdiction of the Family Court to equitably apportion marital property as long as the litigation was initiated before the parties death. 

Types of Property to be Apportioned: 
Real Property - land & things permanently attached to the land
 
Personal Property - generally it is movable items (EX: pictures, collectibles, furniture, banking accounts, vehicles, etc.)
 
Unsecured Debt - loan not backed by underlying asset (EX: credit card debt, medical bills, utility bills, and any other financing arrangement that was extended without a collateral requirement)
 
Secured Debt - loan backed by an asset. Usually awarded to the party receiving the property. (EX: mortgage or car loan) 

How to Divide Assets

REMEMBER: Martial Property is divided upon the dissolution of a marriage.

Equitable apportionment is based on a recognition that marriage is, among other things, an economic partnership. Upon dissolution of the marriage, property accumulated during the marriage should be divided and distributed in a manner which fairly reflects each spouse’s contribution to its acquisition, regardless of which spouse owns legal title. An exception to this is that some property may be transmuted into marital property, which would then require it to be divided. 

What is marital property? 

S.C. Code § 20-3-630 (A) defines marital property as:

"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[.]” 

Apportionment Factors

  1. .Duration of the marriage together with the ages of the parties at the time of the marriage and at the time of divorce or separate maintenance or other marital action between the parties. 
  2. Marital misconduct or fault of either or both parties, whether or not used as a basis for divorce as such.
  3. Value of the marital property. 
  4. Income of each spouse, the earning potential of each spouse, and the opportunity for future acquisition of capital assets.
  5. Health, both physical and emotional, of each spouse.
  6. The need of each spouse or either spouse for additional training or education in order to achieve that spouse’s income potential.
  7. The non-marital property of each spouse
  8. The existence or nonexistence of vested retirement benefits for each or either spouse. 
  9. Whether separate maintenance or alimony has been awarded.
  10. 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. 
  11. The tax consequences to each or either party as a result of any particular form of equitable apportionment. 
  12. The existence and extent of any support obligations, from a prior marriage or for any other reason or reasons, of either party. 
  13. Liens and any other encumbrances upon the marital property. 
  14. Child custody arrangements and obligations at the time of the entry of the order.
  15. Other relevant factors as the trial court shall expressly enumerate in its order.

Equitable Apportionment

Parties can agree on how assets should be divided or the parties can go to trial for the judge to decide.