Divorce can be complicated and messy, involving intense emotions, stressful decisions, and hurt feelings. This is often heightened by divorce settlements that involve valuable assets to be divided. Both spouses may feel they have a claim over certain marital assets, which can lead to conflict. In these cases, the valuation of marital assets can be incredibly important. By understanding what each piece is worth, assets can be divided equitably between both parties, and the matter resolved.
For more specific details on the process of divorce settlements, consider speaking with an experienced South Carolina family lawyer from King Law Offices. Schedule a consultation by calling the offices at (888) 748-KING.
How Does South Carolina Define Marital Estate?
In South Carolina, many operate under the false assumption that the money they earn or the titles they hold are theirs regardless of marriage. However, according to S.C. Section 20-3-630, marital property is defined as any property that has been acquired during the duration of the marriage and is owned at the time that one files for divorce. This means that, regardless of title, any significant asset purchased during the marriage is subject to division.
What Is Considered Non-Marital Property?
However, there are several exceptions to what can and cannot be distributed in divorce settlements. These exceptions generally include gifts to either spouse from someone other than the spouse, inheritances, bequests, and property that is excluded by several different documents.
Prenuptial agreements, legal separation, and other legally binding contracts may have an impact on the definition of certain assets. Official documents will generally take precedence over the general definition of these assets. The court also has the right to determine what is considered a marital asset.
Determining the Valuation of Assets
While many assume there is a formula for the valuation of assets in divorce settlements, the truth is more complicated. While South Carolina supports equitable distribution of marital assets, this does not necessarily mean an equal distribution. Depending on the financial needs of the parties, the circumstances of the divorce, marital misconduct, and the contribution of the spouses to the growth or depreciation of the aforementioned assets.
Who Determines Marital Asset Value?
The valuation of assets is generally determined by the family court, taking several notable factors into account. The court will consider the market value of the assets on the date that the divorce complaint was filed, the contributions of each spouse to the growth of that asset, and the potential of equitable distribution.
Marital Assets That Change in Value
However, the valuation of assets may become difficult when it involves assets that change in value. Investments such as 401k retirement accounts, real estate, business ventures, or other items often fluctuate in value with inflation or changes in the market. Therefore, dividing these assets may not be straightforward, especially when one party has had a direct influence over their appreciation in value.
Active Appreciation
In divorce settlements, active appreciation is the growth of an asset under the direct influence of one or both spouses. By investing time or effort, one or both of these persons increased the value of the asset. This can complicate the valuation of assets and their division, as one spouse may have invested more in the appreciation and may have a greater claim on the item or account.
Passive Appreciation
Passive appreciation occurs without the effort or attention of either party. This is primarily the case with rising real estate prices or flat-rate interest in a bank account. The growth in these assets is generally subject to standard equitable distribution.
For more information on the valuation of assets in divorce settlements, consider speaking with an experienced South Carolina family law attorney from King Law Offices.
Equitable Distribution
According to the South Carolina Bar, South Carolina is an equitable distribution state. While some states divide all property communally between spouses during divorce settlements, South Carolina uses a set of criteria for the judge to determine what is a fair and equitable distribution of the assets involved.
However, in divorce settlements, the decision of the court is second to the out-of-court agreement between spouses. If the spouses agree on the division of property in a legal fashion outside of the courts, the judge will defer to the preference and mutual decision of the divorcees. Whatever remaining items are disagreed upon, the judge will then equitably distribute.
Marital Debt in South Carolina
However, valuable assets are not the only thing divided in a divorce. Debt is also a marital asset that must be distributed during a divorce. This can add another complex factor to the valuation of assets in a divorce settlement. Debt like this may include mortgages, credit card debt, student loans, or others depending on the circumstances.
As with other assets, this can be agreed upon outside of the court or inside. In court, equitable distribution will likely favor the spouse who did not incur the majority of the debt. As with assets that increase in value, the court will generally assign ownership to the spouse who contributed to it most significantly.
What Factors Do South Carolina Courts Consider in Divorce Settlements?
When dividing assets in divorce settlements, courts have several factors to consider. Many of these factors are financial. Courts must take into account the income of each spouse, but also the earning potential. By accurately evaluating the financial capabilities and financial needs, courts can more easily determine what equitable distribution looks like.
However, courts must also consider the physical and emotional factors of divorce. By assessing the emotional and physical health of the spouses, the court can ensure an accurate picture of the situation. This may also include things such as child custody arrangements.
Lastly, courts may also take into account marital misconduct. If the marital misconduct of either spouse led to the divorce or if it had a significant impact on the financial situation, this may also be taken into consideration.
Contact an Experienced South Carolina Family Attorney To Learn How To Protect Your Financial Rights
The financial implications of divorce settlements can be difficult to navigate. Not only must one consider current financial needs and fair distribution, but also future needs and circumstances that may arise. This is especially important when children and custody are involved in the divorce. Being aware of and prepared to address the valuation of assets and settling fairly and equitably can help secure futures and alleviate worries. An experienced South Carolina family lawyer from King Law Offices can help navigate through the process effectively. Consider scheduling a consultation by calling the office at (888) 748-KING.