Business Assets and Divorce in South Carolina
Part of divorce is the court splitting property between the divorcing people. If property is part of the marriage, the court splits it. If property is not part of the marriage, it remains the sole possession of the person who owns it. What does the court do with business assets that one party owns? What if that business started during the marriage? Is that business marital or not? Fortunately, the recent case of McMillan v. McMillan goes a long way to answers those questions.
Case Facts
Husband had started five businesses with a partner while married to Wife. The family court granted a divorce. The court found all five businesses to be marital property. Husband appealed. He argued that they were not marital property. He also appealed other rulings that this post does not discuss.
The Court of Appeals agreed with Husband, in part. The court said that property is marital when a party gets it during a marriage. However, the court also referred to one exception to this rule. If the party used non-marital property to get the property, the property is non-marital. Husband bought two of the businesses with funds from a non-marital business. Thus, he used no marital property to buy or operate the two businesses. However, Husband used a “minimal percentage” of marital funds to get the other businesses. That small amount made those three businesses marital.
Starting a Business while Married
When starting a business while married, you need to consider if you want the business to be marital property. This is something you can and should plan. Furthermore, if you feel your business is non-marital and you are getting divorced, you need to know how to make your case. Making the right case can be the difference between losing and keeping your business. Therefore, an attorney is an essential guide through any divorce.