As much as divorce is a sensitive issue, it is economically and emotionally charged and one of the most sensitive issues is the issue of how to divide property.
In many cases, the family home is not just an important financial asset but also a valuable repository of the couple’s history, so the question of who gets the house is tricky.
It is not as simple as splitting all assets equally but several factors must be considered to arrive at a fair solution for both the husband and the wife.
South Carolina follows the rule of ‘equitable distribution’ in the distribution of properties, which does not necessarily mean equal division.
Therefore, anyone seeking divorce in South Carolina must understand how the law treats marital and non-marital property and the criteria that the court applies in making those determinations.
Understanding South Carolina’s Marital Property Laws
South Carolina like most of the states in the United States applies the principle of ‘equitable division’ in the division of property during divorce under the code section 20-3-10.
What is ‘fair’ is then assessed by the court with an understanding that a 50:50 split may not always be the most just.
Equitable Distribution Principle
Equitable distribution does not imply equal division but it has been based on the principle of justice.
In South Carolina, the court looks at how much property is acquired by each spouse, the duration of the marriage, and the economic status of each party in the event of the divorce.
Marital vs. Non-Marital Property
It is therefore very important to understand the distinction between marital and non-marital property when it comes to equitable division.
Marital Property
This includes all properties and liabilities that have been incurred in the marriage, whether in the name of the husband or wife.
Some examples of marital property include the family home, any bank account that was opened and operated jointly, retirement benefits accrued during the time of marriage, and any income that the couple or either of them may have earned.
Non-Marital Property
In general, property owned before marriage, or received by one spouse by bequest or devise, or as a gift, is classified as separate property. Also, property that is subject to a premarital or postmarital contract is considered separate property.
But if non-marital property is intermingled with marital property (for instance, using personal money to do up a house that is a marital home), it may be converted into marital property.
Factors Determining Marital Property Rights In SC
Several factors determine what constitutes marital property in South Carolina.
Timing of Acquisition
Property acquired during the marriage is generally considered marital property. However, the court will look at the timing and source of the property to make a final determination.
Source of Funds
If an asset was purchased with marital funds, it is likely to be classified as marital property acquired in one spouse’s name. Conversely, if non-marital funds were used, the asset or debt may be deemed non-marital.
Commingling of Assets
When non-marital property is mixed with marital property, it can lose its non-marital status. For instance, depositing inheritance money into a joint account used for household expenses could make those funds marital property.
Transmutation of Property
Sometimes, non-marital property can be transformed into marital property through actions that demonstrate an intention to treat it as marital property. An example is adding a spouse’s name to the title of a property owned before the marriage.
Agreements Between Spouses
Prenuptial and postnuptial agreements can explicitly define certain assets as non-marital, regardless of how they are treated during the marriage. Courts generally uphold these agreements if they are legally sound and entered into voluntarily by both parties.
Factors Considered in Awarding the House After Divorce in SC
The following are some of the factors that determine who gets the family home in South Carolina divorces.
The court aims at a just and reasonable distribution of property and several factors are taken into account before the house is awarded to one of the spouses.
Financial Contributions
To a great extent, the court factors in the financial contributions made by the spouses during the marriage.
This is about determining the income of both spouses, whether earned from a business, investment, or otherwise.
Primary Earner vs. Homemaker
It is also common for one partner to be the breadwinner and the other to be a housewife or stay-at-home parent. The court understands that both of the roles are important for the overall functioning of the family.
It is still considered that the one who earns more contributes more to the family although it is the homemaker who takes care of the family and helps the other spouse to work.
Non-Financial Contributions
Essentials other than finances also have to be considered in the determination of who gets the house.
The court does not merely consider monetary contributions in determining the contributions of each spouse to the marriage.
Home Maintenance and Upkeep
Other factors include home maintenance, organizing housework, and making changes to the home might be a burden when deciding.
If one spouse assumed most of these duties, the court might factor this while deciding on the house.
Child Custody
Child Custody is one of the forms of non-financial contribution. If one spouse was mainly responsible for the children and their upbringing, including their schooling, their activities, or even their basic needs, this is very much appreciated by the court.
Children’s stability and welfare are often considered, especially as to who will stay in the family home and who will not.
Custody of Children after Property Division in SC
Another important factor is the possession of any minor children as this determines who gets to live in the house.
Stability for the Children
The court also tends to focus more on the best interest of the children and this is normally by maintaining the stability of the children’s lives.
The court may also be likely to award the house to the parent who has been awarded the custody of the children in cases where one parent has been awarded the custody to prevent further disruption of the children’s lives.
Proximity to Schools and Support Networks
The court may also look at the distance of the family home to the children’s school, their friends, and other support structures.
Future Financial Needs
Another factor is the future financial capability of both parties to finance the costs of the transactions.
Earning Potential
The court will consider how either spouse will be placed to earn an income after the divorce.
If one of the spouses has higher chances of earning more in the future, he or she may be in a better position to seek other accommodation, thus the other spouse is likely to be awarded the house.
Financial Resources
The present liquid assets including but not limited to savings, investments, retirement accounts, etc are also taken into account. The court wants to make sure that neither of the parties will be left in a very poor state after the divorce.
Options for Dividing House in South Carolina
The issue of real property is one of the most critical aspects that every couple that wants to divorce in sc must consider.
There are several ways of partitioning the house and each of them has its advantages and disadvantages as well as peculiarities of implementation.
Selling the House and Dividing the Sales
Of course, one of the simplest ways of dividing the property that was the marital residence is to sell it and divide the proceeds.
Process of Selling the Marital Home
Selling the house entails choosing a real estate agent, listing the house, and deciding on the right price at which to sell the house. Both parties have to work together from the time the home is taken to market and until the offers are made.
When the house is sold, any dues on the house such as a mortgage or any other lien are cleared, and the remaining balance is split between the spouses.
Considerations for Selling
The timing of the sale is very important as it determines the price that will be given by the buyers in the market. Also, it is important to consider the selling costs including the agent commission, closing costs, and any repair costs if any.
Another area to consider is the after-sale living arrangements of each spouse since selling the home may force both to look for another home.
The Ability of One Spouse to Buy Out the Other
One of the choices is that one of the spouses can repurchase the house from the other spouse and remain the owner.
How a Buyout Works
A buyout is a process in which one spouse purchases the other’s share of the property at a specified amount of money.
This can be achieved through a redemption of the mortgage in the purchasing spouse’s name and use of the cash to pay the other spouse, or through the set off of the home against other marital assets in the process of equitable distribution.
Factors to Consider in a Buyout
Some of the factors that should be considered include; the market value of the home, the equity that is available in the home, and the financial capacity of the buying spouse to pay for the mortgage and buyout price.
There is also a concern about what will happen in the long run when one takes the full mortgage alone, including the possibility of the market and property value changes.
Negotiating a Buyout
To arrive at a reasonable buyout agreement the following factors have to be considered, the market value of a home, the amount remaining on the mortgage, and the potential for the home to appreciate.
There shall be an agreement on the buyout price and this may involve valuations or the intervention of a financial expert.
Deferred Sale Until a Specific Event
The other method is to sell the home at some later time, that is, after the occurrence of some event, for example, when the children are of a certain age or after the termination of a particular financial transaction.
How a Deferred Sale Works
In a deferred sale, one spouse might stay in the home usually the custodial parent of the children until certain event occurs for instance the youngest child attains the age of 18 or the spouse remarries.
In this stage, both parties remain involved in the ownership, and the sale of the home is not affected.
Benefits of Deferring the Sale
The primary use of a deferred sale is to gain stability, especially for children. It enables them to stay in their own home and within their community which reduces the need for change amid an already tumultuous period.
It also provides the spouse who stays behind with time to organize his/her financials before having to relocate.
Drawbacks of Deferring the Sale
The main disadvantages consist of future conflicts over the time and conditions of the sale, the liability for maintenance and mortgages, and the financial insecurity for the non-resident spouse.
Further, the real estate market can change in terms of value during the deferral period making the home’s value differ.
Legal and Financial Considerations
It is crucial to understand the legal and financial consequences of dividing the marital home in case of a divorce in South Carolina. These factors can cause significant and long-term impacts on the financial status and solvency of both the contracting parties.
Legal Professional Services
It is therefore important to seek the services of a lawyer when dealing with issues to do with property division in a divorce.
Role of a Divorce Attorney
A divorce attorney is a legal representative who will help you get through the legal procedures and safeguard your best interest.
Your attorney will also help you in the process of obtaining all the necessary documents that would support your case, including property appraisal and financial statements in support of your desire.
Ensuring Fair Division
A knowledgeable lawyer will also aim at making sure that the division of the marital home is fair bearing in mind the financial and non-financial contributions as well as the future needs of each partner.
Legal help is especially necessary in situations when there are some disagreements concerning the value of the house, the distribution of the received money, or the conditions of the buyout.
Protecting Your Interests
There are many more ways your attorney will help than just making sure that you both get a fair share. This includes such aspects as the mortgage obligation, tax consequences, and the possibility of changes in the divorce settlement in the future.
When you hire a lawyer, you minimize the chances of being swallowed by the terms and also protect your financial welfare.
Tax Implications
The division of the marital home can create tax implications that must be taken into account when the marriage is dissolving.
Transferring Ownership
If ownership of the home is transferred from one spouse to the other in conjunction with the divorce, then this is not generally a taxable event. But for the transfer to be effective, it has to be done in the right manner so as not to attract other taxes that are unwanted.
It is advisable to consult a qualified attorney or a tax advisor to ensure that the transfer does not attract a lot of taxes from the IRS.
Selling the House
If the home is sold as part of the divorce, the amount that is received from the sale may be considered as capital gain and hence the person is liable to pay taxes.
The IRS permits a $250,000 exclusion for single filers ($500,000 for married couples) on the sale of a primary residence, but the exclusion is only available if the home was the taxpayer’s principal residence for two of the five years before the sale.
This exclusion also raises questions about whether the timing of the sale influences it and how the proceeds will be taxed on the return.
Other Financial Aspects
Other taxing issues include the allowances for mortgage interest and property taxes, which may differ after a divorce, and the effect of alimony or child support as a deduction from gross income.
It is crucial to comprehend these tax consequences to advise on the division of properties and to map out your finances after the divorce.
Refinancing and Mortgage Responsibility
Determining who will take responsibility for the mortgage after the divorce is a critical financial consideration.
How Mortgage Responsibility is Determined
If one spouse is awarded the home, they typically assume responsibility for the existing mortgage. However, the mortgage lender will still hold both parties liable unless the mortgage is refinanced.
It’s crucial to address this in the divorce agreement to avoid future financial entanglements. Failing to refinance or release one spouse from the mortgage can lead to credit issues if the paying spouse defaults.
Refinancing Options
Refinancing the mortgage in the name of the spouse who retains the home is a common solution. This involves applying for a new mortgage that pays off the existing loan and removes the other spouse from financial responsibility.
The spouse refinancing must qualify for the loan based on their income, credit score, and the home’s equity. It’s important to shop around for favorable refinancing terms and consider the costs associated with the process, such as closing costs and potential changes in interest rates.
Considerations for Refinancing
Before agreeing to refinance, both parties should consider the long-term financial implications.
The spouse taking over the mortgage must ensure they can afford the payments on a single income, and they should also evaluate the potential for future appreciation or depreciation of the home’s value.
Additionally, if the market interest rates have risen since the original mortgage was taken out, refinancing could result in higher monthly payments, which should be factored into the decision.
How Our South Carolina Divorce Lawyers Can Help You
Divorce is one of the most painful processes in people’s lives, and managing the legal procedures of separation may be equally difficult.
At Max Hyde Law Firm, our divorce lawyers are always ready to offer you the help, advice, and representation that you require to safeguard your interests at this trying period in your life.
Personalized Legal Advice
Every divorce is different because the circumstances are different and, therefore, the problems are different. All our divorce lawyers are dedicated to listening to your case and what you hope to achieve or fear to avoid.
Our services are oriented to provide you with individualized legal consultation that would guide you throughout the process.
Defending Your Legal Rights and Entitlement
Divorce entails many decisions that are legal and financial that may affect one’s life in the future. They are dedicated to safeguarding your rights and making sure that you are well-represented at all times.
We negotiate on your behalf in all contractual and other disputes, in mediation, and court, to ensure that you get a fair share.
South Carolina Divorce Laws
Divorce laws in South Carolina may be somewhat rigid in some aspects, and certain aspects such as division of properties, alimony, adultery, and child custody.
Both of these laws have been a working tool in the hands of our lawyers to use in solving your case in the family court. We are current on the specificities of the current legal environment and translate it into a strategy that meets your goals.
Protect your property rights
If you find yourself in a divorce situation do not endure the process alone. Below, please find some of the best divorce lawyers who are ready to help you, guide you, and represent you.
Call us today at (864) 804-6330 to set up a free consultation and learn how you can protect yourself, your family, and your assets tomorrow. We are here to guide you through this challenging period as you should be confident and clear.
