There are three important concepts to keep in mind when determining who gets what in a South Carolina divorce.  The first two of these are “marital property” and “nonmarital property“. 

How these classifications work is governed by the provisions of the Equitable Apportionment of Marital Property Act” (the Act).   The Act defines marital property as all real and personal property acquired by the parties during the marriage that is owned as of the date of filing for divorce, regardless of how legal title is held.  S.C. Code Ann. § 20-3-630(A) (Supp. 2009).  Under the Act, property acquired by either party before the marriage is nonmarital property.  Id. § 20-3-630(A)(2).   

Easy, right?  Not exactly.  The third concept that needs to be factored in is called “transmutation.”  Transmutation is the process under which property that started out as nonmarital is “transmuted” into marital property during the marriage.  

As the Court of Appeals once stated, “[t]ransmutation occurs if the property is utilized in support of the marriage or in such a manner as to evidence an intent to make it marital property.  Canady v. Canady, 296 S.C. 521, 523-24, 374 S.E.2d 502, 503 (Ct. App. 1988). 

Transmutation is tricky because it is a factual issue that must be proved by evidence of the spouses’ intent. As the Court of Appeals reiterated in the recent case of Pruitt v. Pruitt on August 4, 2010, “[t]ransmutation is a matter of intent to be gleaned from the facts of each case, and the spouse claiming transmutation “must produce objective evidence showing that, during the marriage, the parties themselves regarded the property as the common property of the marriage.”  

In this case, the house was built (but not completed) by Husband prior to the marriage.  It was located on land that belonged to Husband’s Mother, who conveyed the land to Husband after the marriage.  Husband, however, reconveyed the land to Mother after he suspected Wife of cheating on him.  At some point, Mother conveyed the land back to Husband, who then conveyed it to Sister, who apparently loaned funds for the completions made to the house.

The fact that the Pruitt’s lived in the house together for the duration of their marriage would not, in and of itself, establish transmutation.  As the Court stated “the mere use of separate property to support the marriage, without some additional evidence of intent to treat it as property of the marriage, is not sufficient to establish transmutation.”

There has to be something more.  In the Pruitt case, Wife helped with completions to the home, but apparently funds for such additional work came from Husband’s Sister (and not, crucially, from “marital” funds).  Furthermore, Wife failed to show how her work had enhanced the value of the house.The case was remanded to Family Court to determine these unanswered questions.

  Although the Court of Appeals agreed that no transmutation occurred, it did note that Section 20-3-630(A)(5) of the South Carolina Code (Supp. 2009) “allows a spouse a special equity in the increase in value of nonmarital property when the spouse contributes directly or indirectly to the increase.”