Generally in SC only property that is acquired during the marriage will be included in the marital estate. But sometime property inherited or acquired by gift before or during the marriage can also become, or “transmute” into, marital property subject to division.
SC law is very clear that “nonmarital property may be transmuted … if it is used by the parties … in some manner so as to evidence an intent by the parties to make it marital property”. Nestberg v. Nestberg. So if the key determination is the intent of the married couple during their marriage, how does one glean this?
Last month the South Carolina Court of Appeals clarified the “Doctrine of Transmutation” in the case of Conits v Conits. In this case, the parties were married 24 years and Mr. Conits, at the time of the marriage, owned real property in Greece. At all times the property was kept separately titled and mortgaged. In spite of this, the court found the property had been transmuted into marital property and divided it with Ms. Conits. How so?
Mr. Conits claimed that his property in Greece had never been used as the primary residence, had never been jointly titled, and had never been used to support the marriage. In fact, it appears he was correct in these facts. But Judge Guyton distinguished these facts by making a very wise observation.
In reviewing the evidence, Judge Guyton was required to consider evidence that included how the property was titled, how Mr. Conits came into possession of the property, whether or not it was used exclusively for marital purposes, whether it was commingled with marital property, whether marital funds were used to build equity in the property, or was it exchanged for marital property.
In the Conits matter, Judge Guyton found ample evidence to conclude that Mr. Conits had used marital funds to build equity in his real property located in Greece during the marriage. It was this fact that caused the court to rule as it did: the fact that marital funds had essentially been co-mingled with non-marital property in such a way as to make the two indistinguishable.
This is a good ruling for many women in SC who have had the traditional role of homemaker. Sometimes a person who wants a divorce plans the divorce for years in advance without telling the other party. This provides ample opportunity to transfer marital funds into property that is owned separately or take many other measures to conceal cash and hide hard assets.
The Conits case is a perfect example of a good use of a forensic CPA. Often times lawyers retain CPA’s to simply to build a spreadsheet. Preparing a spreadsheet is the lawyer’s job, and it need not be an additional cost to clients. Modern software, such as settlyd.com, will prepare accurate and current financial spread sheets without the need to create formulas and check your math, nor pay a pricy CPA do the same. If you believe strongly that a person is hiding assets, or there is a business that must be valued, then by all means retain a CPA, and it may be malpractice if you don’t. But in simple asset division cases, get settlyd.com, or learn Excel, your clients will thank you for it!