SPLITTING-UP: Equitable Division of Marital Assets and Debts

Part of almost any divorce is dividing the Marital Estate. In South Carolina, the law requires “equitable division.” This includes identification, valuation, and fair division of the Marital Estate. What’s fair is largely in the discretion of the judge, which is one reason negotiating a settlement may be in your best interest.

In South Carolina, the Marital Estate is defined by Code Section 20-3-630. Generally speaking, the Marital Estate includes all assets and debts acquired during the marriage (bank accounts, cash, retirement plans, credit cards, lines of credit, houses, time-shares, vehicles, boats, IRS debt, stocks, frequent flyer benefits, furniture, art, antiques, collectibles, military benefits, etc.). There are some exceptions, however, such as inheritance and gifts, which even if acquired during the marriage are usually not marital property. This is not to say an inheritance or gift can never be marital property. If individual assets are commingled with marital property or the other spouse’s assets, they may be subject to equitable division. For instance, if inheritance funds are deposited into a joint account, they would then be subject to equitable division by the Family Court. Likewise, “transmutation” and “special equity” are legal doctrines whereby individual assets may become subject to equitable division if they have been treated by the spouses as marital property or if significant contributions are made by the non-owner spouse. For example, where an individual owns a home at the time they get married, if their spouse contributes to the mortgage payment, makes substantial improvements, pays the taxes, etc., the Family Court may deem the home marital property and divide its value between the two spouses. How property is titled has no bearing on how it will be divided by the Family Court. The value of marital assets can be determined through appraisals, market analysis, estimated resale value, military regulations, expert opinion, and various other means.

The Court will also determine each spouse’s responsibility for the debts acquired during the marriage. As with assets, it makes no difference who’s name the debts are held in. Typically in the eyes of the Family Court any asset acquired and any debt incurred during the marriage is the asset or debt of both spouses. In deciding how to divide the marital debt, one factor the Court will consider is for what purpose the debt was acquired. For example, credit card debt used to purchase items for the household will likely be divided fairly equally; whereas, if one charges a vacation with their paramour, it’s not likely their spouse would be required to contribute to that debt.

You must file an action for Divorce or Separate Support and Maintenance in order to stop the accumulation of marital assets and debts, and secure the marital estate. Courts can not turn back the hands of time and the Family Court will usually not un-do what’s been done during the marriage. If a spouse cashes in his or her 401(k) and gambles the money away in Vegas before the other spouse files an action in the Family Court, it is unlikely the Court would require him or her to reimburse the other spouse any portion of those funds unless it can be shown it was done in contemplation of the Family Court action. Another way to say it is what’s done is usually done. This is one reason it may be important to file very soon after your separation.

Each spouse is generally deemed to have a fairly equal interest in the Marital Estate; although, there is no rule requiring the Marital Estate to be divided 50/50. The Court will consider many factors in deciding what is a fair division. This will include the length of the marriage, marital misconduct (adultery, physical cruelty, drug abuse, alcoholism), both spouse’s income, alimony, custody, etc. These factors are spelled out in SC Code Section 20-3-620.

Even in a relatively short marriage it is important to consult with an attorney when going through a separation or divorce. You may be entitled to more than you realize. If you have very few assets, it is still important to know your rights regarding marital debt, and to understand your exposure to future debts that may be incurred by your spouse.

To schedule an appointment with Ms. Adkins, call (843) 486-2442 or email her at Dana@DanaAdkinsLaw.com.


Snooping and Spying Spouses

It’s a horrible feeling when you “know” in your gut that your spouse is cheating, but if you’re not careful snooping may land you in a great deal of legal trouble. A 2012 Wall Street Journal article reports several instances of spouses who were convicted of stalking, harassment, invasion of privacy, and violations of the federal Wiretap Act for going too far. In addition to criminal charges, the even greater risk is civil penalties. There are several instances in which a spouse was ordered to pay upward of $20,000 in damages for illegally accessing their spouse’s electronic communications.

Even your spouse has a legal right to privacy. Federal wiretapping laws protect personal communications, as do many state laws, from unauthorized access. In this age of technology snooping has many forms from reading email messages, reading text messages, recording conversations, using hidden cameras, accessing Facebook accounts, utilizing “find my iPhone” features to track movement, to GPS tracking. In 2012, the American Academy of Matrimonial Lawyers reported, 92% of divorce attorneys have seen a rise in the use of information obtained from smartphones, particularly test messages, as evidence in divorce proceedings. As has been declared – “Divorce: There’s an App for that.” Assuming you dig something up, however, it may not necessarily be admissible in court.

Judges tend to frown upon parties who attempt do-it-yourself unearthing of evidence. There are many evidentiary issues that could prevent the evidence from being considered by the court, including authentication, hearsay, and fruit of the poisonous tree. Once a case is filed in the Family Court, however, your attorney will have the right to obtain your spouse’s phone records, emails, Facebook posts, etc. through a formal (and legal) process called “discovery.’ A licensed private investigator can also (legally) obtain the evidence needed to prove your case in court. 

Bottom line: If it feels like you are invading your spouse’s privacy, you are probably obtaining the information illegally. The risks likely outweigh the benefit. You will be better served by hiring an attorney to guide you through the legal process. Also, it’s important not to lose yourself in the course of a divorce –

You know who and what your [spouse] is, so the question is who you are and what has this marriage done to you. You know that being an electronic parole officer is not going to make your [spouse] faithful and reliable. You say [s]he has put your health at risk and your marriage is a sham. So the real question is not whether your snooping is justified, but when you are going to decide to get out.

(Emily Yoffe, Ethics of Spying on Your Spouse, Slate.com, October 23, 2012.)