Non-marital property is the official term for property not considered part of the marital estate.
Non-marital property means separate property that does not get divided in the divorce. In South Carolina, courts consider gifts, inheritances, or property acquired before the marriage to be non-marital property, thus not subject to division. If this is not to your liking, you’ll need to specify it clearly in a legal document (such as a prenup or postnup) otherwise.
>>For more fine print, review South Carolina Code of Laws, Section 20-3-630 Who gets the business, and who gets the jewelry?
In 2013, a South Carolinian couple filed for divorce on the grounds of adultery. The divorce was granted, but the big issue, in this case, was the division of a business and some diamonds. The husband was 66 years old, and the wife was 48 years old at the time of the divorce. The husband had a successful business founded before the marriage. The couple lived off the profits from the business during the marriage. The wife worked for the company and used the company car, phone, and gas card. Additionally, the husband also gifted the wife jewelry during the marriage.
Remember, South Carolina is an equitable distribution state, meaning that “marital property” is divided in divorce. When property is deemed “separate property” (in South Carolina, it’s called non-marital property), such property is not divided, and the spouse may keep it. The question is: should the business and jewelry in question be considered marital or separate property?
The South Carolina court said the jewelry in question should be considered a gift, and gifts between spouses during the marriage are marital property. This means the jewelry should be divided.
As for the business, this court said it was non-marital property (a.k.a. separate property), and the husband should keep it. There are many factors the court used to support this decision. The first of the reasons is that the husband did not intend to make the business a commingled asset. The business was initially considered separate property because the husband founded it before the marriage. If it were to be considered marital property, evidence must show that the husband intended to make the business a shared asset. This was not the case here.
Secondly, the court said that because the wife was a salaried employee for the business, it shows that her work there was not to further the business or put sweat equity into the business. Instead, she was compensated for her work as if it were any other business. Just because she worked for the business doesn’t mean the entire business itself should be considered a shared asset.
Finally, because no marital funds were used to increase equity in the company, it shows that the business was not a marital venture. In other words, because the wife did not invest her funds or the couple’s shared funds, it is evidence showing the business was meant to be kept separate.
What’s the bottom line here? First, if you give a gift to your spouse during the marriage, it will be split up in the divorce. Second, property that you acquired before the marriage will stay your property in the divorce unless you show strong intent to have it be marital, shared property.
McMillan v. McMillan, 790 S.E.2d 216 (2016)