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Dividing Complex Assets in South Carolina Divorce Proceedings
Divorce is never easy, and dividing property can be even more challenging when it involves complex assets. For South Carolina couples navigating complex asset division during divorce, it’s important to understand the law, consider expert advice, and approach negotiations thoughtfully. If you’re facing this difficult process, consider consulting with an experienced divorce attorney who can guide you through each step and protect your interests.
What Is South Carolina’s Equitable Distribution Law?
In South Carolina, marital property is divided according to the principle of equitable distribution. Unlike community property states that split assets 50/50, equitable distribution considers fairness, which doesn’t always mean equal. The courts evaluate a range of factors when determining a fair division, including how long the pair were married, the contributions of each spouse, the value of each spouse’s separate property, and more.
How Are Marital vs. Non-Marital Property Identified?
The first step in dividing assets is categorizing them as marital or non-marital. Marital property generally includes all of the assets and debts acquired during the marriage. Non-marital, or separate, property includes assets one spouse owned before the marriage, inheritances, and gifts given specifically to one spouse unless they were commingled.
A significant hurdle in complex asset division is commingled assets—when separate property is mixed with marital property. For example, if one spouse uses an inheritance to buy a family home in both spouses’ names, the asset may lose its separate property status.
Documentation and proper financial records are vital to trace and protect separate assets.
Which Complex Assets Are Valued?
When dealing with complex assets, accurate valuation of the assets is critical.
Business Interests
If one or both spouses own a business, determining its value is a complex process that typically requires a professional business appraiser. Courts will consider revenue, market conditions, assets, liabilities, and goodwill.
Real Estate Holdings
Properties owned beyond the primary residence, such as commercial real estate, vacation homes, or rental properties, must be accurately valued. Depending on market conditions and tax implications, selling real estate or deciding who retains ownership can be contentious.
Investment Accounts and Stock Options
Stocks, bonds, retirement accounts, and investment portfolios must be divided carefully. Retirement accounts like 401(k)s or pensions often require a qualified domestic relations order to ensure a fair division and avoid penalties.
Debts and Liabilities
Just as assets are divided, so are debts. Complex divorces often involve mortgages, credit card debt, business loans, and tax liabilities. How these debts are handled can significantly impact each spouse’s post-divorce financial standing.
Hiring Valuation Experts
Valuation experts can play a crucial role in divorce proceedings involving complex assets. Depending on the nature of the assets, parties may need financial advisors, CPAs, forensic accountants, real estate appraisers, and business valuation experts. Hiring professionals ensures that all assets and liabilities are accurately assessed, preventing costly mistakes or unfair distributions.
How Can You Ensure Full Financial Disclosure?
A major concern in complex divorces is the potential for one spouse to hide or undervalue assets. South Carolina law requires full financial disclosure by both parties. Failing to disclose assets can lead to serious consequences, including the court awarding a greater share of the marital estate to the aggrieved spouse.
There are several signs that assets are being hidden during a divorce. One sign is sudden changes in income or expenses that may indicate attempts to manipulate financial disclosures. Unusual bank account activity, such as unexpected withdrawals or transfers, could be a red flag for hidden funds. Spouses may engage in secretive business dealings, potentially hiding income or the actual value of assets. Also, loans made to friends or family members might be used to shift or conceal marital assets temporarily. If you suspect your spouse is hiding assets, consult a forensic accountant or legal professional who can trace complex financial transactions.
How Might a Settlement Be Negotiated?
Not all complex divorces need to end up in court. Many couples prefer to resolve asset division issues outside of court through negotiation, mediation, or collaborative divorce. This approach is often less adversarial, less costly, and offers more privacy than a court case.
Mediation
In mediation, a neutral third-party mediator helps the spouses work through asset division and other issues. This is a good option for couples who can communicate and compromise effectively.
Collaborative Divorce
This is a structured process where both spouses agree to work together, with the help of their attorneys and other professionals (financial advisors, therapists, etc.), to reach a fair agreement.
Settlement Agreements
If the parties can agree on how to divide assets and liabilities, they can draft a settlement agreement, which becomes legally binding once approved by a judge.
What Are the Tax Implications Following a Divorce?
Another significant aspect of complex asset division is understanding the tax implications of various decisions. Dividing retirement accounts, selling real estate, and transferring ownership of other assets may all have tax consequences that must be carefully weighed. Consulting with a professional can help you understand and reduce any tax liabilities arising from asset division.
Protect What Matters Most. The Howze Law Firm LLC Provides Experienced Legal Help for Complex Divorce Cases.
Divorce is challenging, especially when it involves high-value or complex assets. At The Howze Law Firm LLC, we will guide you through every step of the process. We work with financial experts to accurately value and protect your assets. If you suspect hidden assets or need strategic negotiation for a fair outcome, count on us for thorough representation and results-driven solutions. Get the expertise you need to safeguard your future. Call 803-266-1812 for an initial evaluation.
