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.)


Be Warned: Facebook, Text Messages, E-mail, etc. Are All Fair Game

In the legal world it’s called Electronic Discovery (E-Discovery), in the “real world” it’s called spying or even “cyber-stalking” but regardless of the label, your cyber-presence can be used against you in court.  There are numerous examples of Facebook, text messages, e-mail, etc. being used as evidence of adultery, poor parenting, to refute an alibi, to demonstrate capacity to work, to prove substance abuse, and countless other things.

It would seem common sense that you shouldn’t change your status to “single” or “in an open relationship” if you’re married (and in South Carolina, you’re married until you’re divorced – PERIOD!) but common sense seems to be lost in cyberspace.   It’s important to note each of the antidotal examples below involves everyday people involved in everyday litigation.  The use of e-discovery is now common-place in the courts  – The Wall Street Journal reported in May 2012, “[m]ore than a third of divorce filings last year contained the word Facebook. . . .”  Thus, be warned:  Facebook, text messages, e-mail, etc. are all fair game!

1.  Deleted is not deleted and there’s no such thing as an anonymous post on the internet, no matter hows smart you think you are – forensic examiners WILL be able to find it. Last year, I was involved in a family court case, where the parties both alleged the other had made death threats and abused the child. The judge ordered all parties to turn over their computers, cell phones, and tablets to the South Carolina Law Enforcement Division (SLED) to determine the nature and content of e-mails and text messages sent between the parties. The judge also assured the parties they would soon have a lot more to worry about than their family court case – if any of the allegations were true, appropriate charges would be brought AND if none of the allegations were true, appropriate charges would also be brought for providing false information.  In another case, while on the stand testifying about  his Facebook posts, a Defendant said “I’ve been meaning to delete that account” – the judge didn’t appear amused and it certainly wouldn’t have helped his case (mind you, I already had printed copies of his page).

2.  If you claim to be injured (physically, emotionally, or financially) your Facebook page better not show otherwise.  In February 2013, LexisNexis reported on  a sexual harassment case brought by the Equal Employment Opportunity Commission (EEOC) against the Original HoneyBaked Ham Company of Georgia, Inc., the Defendant sought information from the women’s Facebook pages as evidence of their lack of credibility and to demonstrate their actual emotional and financial state at the time they claimed to be distressed. The Judge held “The fact that [the information] exists in cyberspace on an electronic devise is a logistical and, perhaps, financial problem, but not a circumstance that removes the information from accessibility by a party opponent in litigation” and ordered the women’s Facebook accounts be examined by a forensic expert (paid for by the parties). Examples of the evidence sought included a photo of one of the women wearing a t-shirt imprinted with an offensive term to describe women, comments as to the women’s financial expectations from the suit, comments about unrelated traumatic events effecting their emotional state at the same time, and sexually explicit communication with the other women. EEOC v. The Original HoneyBaked Ham Company of Georgia, No. 11-cv-02560-MSK-MEH (D. Colo. Nov. 7, 2012).

3.  The past is not the past.  You should not post anything on Facebook (or say anything in a text message, e-mail, etc) that you don’t want broadcast from the highest mountain top now or ever.  A few years ago, I observed a civil court trial where the Plaintiff alleged he was no longer able to pursue his career as a musician because he allegedly suffered from a deviated septum resulting from a car accident.  At trial, the Defendant presented the Plaintiff’s own Facebook updates as evidence.  His posts showed a long history of sinus infections, nosebleeds, and medical treatment for symptoms of a deviated septum.  It definitely threw a wrench in the Plaintiff’s “but for” causation argument.  The case settled at lunch that day.

4.  Please do check in, and tagging everyone who’s with you is also helpful.  Thanks, Opposing Counsel.  I recently won a Family Court Rule to Show Cause in large part because the Defendant claimed he couldn’t afford to pay his obligations, all the while “checking in” at every stop on his four-city-tour of Florida.  It also didn’t hurt that he tagged his new girlfriend with him.

5.  Debit cards are equivalent to a personal diary.  For heaven’s sake, have enough sense not to buy flowers or lingerie online if you’re not giving it to your wife.

6.  Zip your lips (and your keyboard).  As reported in the July/ August 2012 edition of the Young Lawyer, technology “has transformed communications between lawyers and their clients and poses unique problems for preserving attorney-client privilege, [and] the work product doctrine . . . .”  It’s easy to inadvertently waive these privileges by disclosing confidential information to third parties.  In one case, Lenz v. Universal Music Corp., No. 5:07-03783, 2010 U.S. Dist. LEXIS 125874 (N.D. Cal. Nov. 17, 2011), a Plaintiff was found to have waived his attorney-client privilege by sending e-mails to third parties and blogging about conversations with his attorney.  Clients (and prospective clients) frequently get upset and even angry when their best friend, momma, daddy, or even their GF/BF is not permitted to sit in on meetings with their attorney.  There’s many good reasons for this policy, not the least of which is protecting attorney-client privilege.  Also, attorney’s should never, ever, communicate with a client regarding a case on Facebook or chat.

7.  Nothing is Secret on the Web.  Regardless of your privacy settings, password protection, or other means of securing your personal cyber world, it is always possible a judge will order you to turn it over, or even provide the opposing side your username and password.  Another take home lesson is friends are friends forever. You can “unfriend” your spouse but your friends have friends who have friends . . . I’ve never encountered a case where despite many degrees of separation, we weren’t able to access the other sides Facebook page.

8.  Keep your kids out of it!   Do Not, I repeat, DO NOT, post pictures or videos of your children with your new partner, in front of a bar, or with you on a dating website while you’re going through a custody case.  Also, keep in mind that if you post pictures of your new partner at an event and also post (separate) pictures of your children at the same event, it’s likely going to be easy to prove your children have been exposed to your paramour.

9.  Just because you can doesn’t mean you should.  In October 2012, a colleague, Benjamin Stevens, blogged about spying during divorce.  Mr. Stevens cautioned potential problems include criminal charges for invasion of privacy or stalking, or even civil suites such as trespassing.  He pointed to an example of a mother who was found guilty of violating the Federal Wiretap Act for placing a listening devise in her daughter’s teddy bear to record the girl’s father.  The law is dynamic and as suggested by Mr. Stevens, “it’s best to avoid any such stealthy operations” until you’ve consulted with an attorney.  Another colleague, Greg Foreman, also blogged in October 2012 about a South Carolina Supreme Court Case, Jennings v. Jennings, Opinion No. 27177 in which a husband sued his wife and her private investigator for invasion of privacy, conspiracy, and violations of the federal Stored Wire and Electronic Communications and Transactional Records Access Act (SCA), 18 U.S.C. § 2701.  Although, the Court’s decision was complicated, the take home lesson was certainly, it’s a bad idea to hack your spouse’s e-mail account; instead you should consult an attorney and go through proper discovery to obtain any such evidence.

Prenuptial Agreements: Do I need one and how do I know it will be enforceable?

Prenuptial Agreements (Also referred to as antenuptial agreements) were once thought to be for celebrities and the ultra wealthy (10 Biggest Celebrity Prenups).  Today, however, they are much more common.  Some are getting married for the second time and want to avoid another difficult divorce, and others simply look at the high rate of divorce as an ominous reality and want to protect their little nest egg (however small or large).  Because couples are marrying later in life, particularly those with a bachelor’s degree or higher, many want to protect the assets they’ve worked hard to acquire before saying “I do.”  The bottom line is “you don’t have to be a Rockefeller or Trump to need a premarital agreement.”

Bankrate.com suggests you should consider having a prenup if you:

  • Have assets such as a home, stock, or retirement funds;
  • Own all or part of a business;
  • May be receiving an inheritance;
  • Have children and/ or grandchildren from a previous marriage;
  • One of you is much wealthier than the other;
  • One of you will be supporting the other through college;
  • You have loved ones, such as elderly parents, who need to be taken care of;
  • You have or are pursuing a degree or license in a potentially lucrative profession (such as, law or medicine);
  • You could see a big increase in income because your business is taking off, or that garage band you play in has just gotten a contract with a big record company.

I would add to this list – if either of you has substantial debts.  A prenuptial agreement can protect your marital property from your spouse’s premarital creditors.

After you’ve decided that you need a prenup, you should tell your partner sooner than later.  Ideally, you should have an attorney draft your prenuptial agreement at least six months before the wedding.  This helps to close the door to any future claim of duress to invalidate the agreement.  While it may be possible to draw up and execute the agreement a few days before your wedding, it’s not smart.  It is in your best interest to provide the document to your partner at least 4 – 6 weeks before your wedding.  This will help ensure your agreement is enforceable.  If you’re planning to have a prenuptial agreement, a good rule of thumb is the Save the Date cards don’t go in the mail until you have met with your attorney, the agreement has been drafted, and presented to your partner.

The South Carolina Supreme Court has held that prenuptial agreements “will be enforced if made voluntarily and in good faith and if fair and equitable. . . .”  (see Hardee v. Hardee, 35 S.C. 382, 585 S.E.2d 501 (2003)).  The Court set forth three (3) elements to determine if a prenuptial agreement should be enforced:

  1. Was the agreement obtained through fraud, duress, or mistake, or through misrepresentation or nondisclosure of material facts?
  2. Is the agreement unconscionable?
  3. Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?

Id. at 389, 585 S.E.2d at 504 (internal quotations omitted).

In South Carolina, in order for your prenuptial agreement to be valid it must be in writing, executed voluntarily after full financial disclosure, and each party should be represented by counsel (or at least be given ample time to consult with an attorney).

The take home lessen is plan ahead, communicate openly with your partner about your finances, and consult with an attorney.

Tips for The Wise Divorcee

Once a judge signs your “Final Order and Decree of Divorce” the divorce process is complete.  You’re free to walk naked in your home, go on a trip, and dominate the TV remote (for other ideas see: Thrive in Life).  There, however, are likely loose ends that you should tie up to ensure nothing throws a wrench in your new plans.  The following information is provided to help you create a list of “to-do’s.”  This is not a comprehensive list and is merely general information.  It may not be specifically applicable to your case depending on the particular facts of your divorce.  If you have any questions about the Decree you should contact your attorney immediately.  For tax advise, you should contact your tax preparer.

1.  Make a new will.

2.  Review existing life insurance, annuities, pension, profit sharing plans, IRA’s, 401(k)’s, and other types of insuring agreements in which you have named your former spouse as a beneficiary.  If you do  not want your former spouse to remain a beneficiary on these policies or plans, then you must change the beneficiary.

3.  Keep in mind, court orders regarding responsibility for payment of debts and liabilities are effective between you and your former spouse, but do not bind the creditor (for example your mortgage lender).  If your former spouse is responsible for payment of any debts or liabilities for which you are also a named borrower, keep an eye on your credit report or follow-up with the lender to make sure these debts and liabilities are paid as agreed.

4.  If you still have joint credit cards with your former spouse, the only sure way to protect yourself against liability for further charges is to cancel the credit card.  You should notify the credit card company directly by certified mail, return receipt requested, that you wish to close the account.

5.  Before you sign any future tax return or take any action with respect to your federal or state income tax returns, please review your situation with your tax advisor.

6.  If you’re vehicle was jointly titled, you should re-register it solely in your name.

7.  Make sure all joint bank accounts are closed and distribute the balances per your divorce decree.

8.  If you were awarded custody and wish to move out-of-state or a considerable distance from your current home in the future, discuss your intentions with your attorney before you put your plan into action.

9.  Keep a written log of all support payments in the future.  This should include the date due, amount due, date paid, and amount paid.  This will be handy if there’s any problems down the road.

10.  Try to co-parent effectively.  Keep in mind that just because someone was a horrible spouse does not mean they are a horrible parent.  Co-parenting websites such as Our Family Wizard provide an excellent tool to communicate and share information without directly speaking to your former spouse.  Plus, if you and your co-parent reach an impasse, you have very clear and accurate documentation of who said what and when it was said.

10 Myths About South Carolina Family Law

1.  If you were married in S.C., your divorce should be filed in S.C.  Where you were married is not relevant in determining where you can get divorced; where you and your spouse currently reside is what matters.  In order to file for divorce in S.C., at least one of the parties must have been a resident of S.C. for more than a year, or both parties must have resided in S.C. for at least 3 months.  

2.  It’s always a good idea to file before the other person does in order to get the upper  hand.  The person who files fist (Plaintiff) has equal rights to person who responds to the complaint (Defendant).   

3.  As long as you’re separated, you can date other people.  You are married until the day of your divorce.  Dating during a separation period could permanently bar you from alimony and may affect custody, no matter what your separation agreement says.  Also, remember S.C. Family Courts do not require proof that you’ve actually committed adultery; it is only necessary to prove that you had the inclination and the opportunity.  Just being seen in suspicious circumstances may be enough proof.  

4.  If you have lived with your girlfriend/ boyfriend in S.C. for over 5 years,  you’re married by Common Law.  Common Law Marriage does exist in S.C., but it is not determined by the length of time a couple has lived together.  

5.  A parent who is not paying child support has no right to visitation with his or her child.  Visitation rights are not linked to a parent’s payment or non-payment of child support.  

6.  If you’ve been married for less than a year, you can get an annulment.  Annulments are extremely rare, extremely hard to obtain and are not based on the amount of time you’ve been married.  

7.  If you lose your job, you can stop paying child support.  To modify a child support order, you must file an action to seek relief from the family court.  If you don’t pay your child support as ordered arrears will accrue and you may be held in contempt.  

8.  The father can’t get custody in S.C.  Either parent can get custody; it is determined based on what’s in the best interest of the child.  Also, just because a person is a less than stellar spouse, does not necessarily mean they are a bad parent.

9.  I paid for it, it’s mine.  Property acquired during your marriage is likely “marital property” and may be subject to division by the Family Court.  Even property that was “yours” prior to the marriage may now be “marital property” and may be subject to division by the Family Court.  

10.  You can get divorced based on emotional abuse.  Emotional abuse is not a ground for divorce in S.C.  There are only 5 grounds for divorce in S.C.:  Adultery, Physical Cruelty, Desertion for more than one year, Habitual Drunkenness/ Drug Abuse, and Separation for a period of one year.