## How is property divided in a Vermont divorce? Vermont is an **equitable-distribution** state — like 40 other states and DC. Marital property is divided "equitably" — meaning fairly, NOT necessarily 50/50. The court considers each spouse's contributions, financial circumstances, length of marriage, and many other factors to decide what's fair. Pre-marital property, gifts, and inheritances are usually "separate property" and stay with the original owner. ## Marital vs separate property Both systems start by classifying every asset: **Marital property (or community property)** — divisible at divorce. Includes: - Income earned during the marriage - Real estate purchased during the marriage with marital funds - Vehicles purchased during the marriage - Retirement contributions made during the marriage - Investment accounts funded during the marriage - Business interests acquired or grown during the marriage **Separate property** — usually stays with the original owner. Includes: - Property owned before the marriage - Gifts received by ONE spouse - Inheritance received by ONE spouse - Personal injury settlements (in many states, the pain-and-suffering portion) - Property excluded by a valid prenup or postnup ## Where it gets messy: commingling and tracing Separate property can lose its character if it's mixed with marital property — called **commingling**. Common scenarios: - One spouse's pre-marital savings deposited into a joint account - An inheritance used to renovate the marital home - One spouse's pre-marital house paid down with marital wages - A separate-property business that grew because of both spouses' efforts When commingling happens, the burden falls on the spouse claiming separate property to **trace** the asset — show with records that the original separate funds are still identifiable. Without good records, courts may treat the entire asset as marital. ## Hidden assets It's surprisingly common for one spouse to hide assets — offshore accounts, undeclared cash income, business assets undervalued on paper, transfers to family members shortly before filing. Forensic accountants and discovery tools (subpoenas, depositions, interrogatories) exist to flush them out. If you suspect hidden assets, raise it with your lawyer early. ## Debts get divided too Divorce splits debts the same way it splits assets: - Credit-card debt incurred during the marriage is usually marital - Pre-marital student loans typically stay with the spouse who incurred them - Mortgages and car loans tied to specific property usually follow that property - Joint liability to creditors does NOT go away just because the divorce decree assigns the debt — refinancing or paying off joint debts is the only way to truly separate ## What courts look at when dividing equitably In equitable-distribution states (and even in community-property states for separate property), courts typically consider: 1. Length of the marriage 2. Each spouse's age and health 3. Each spouse's income and earning capacity 4. Contributions to the marriage (including non-monetary contributions like raising children or homemaking) 5. Each spouse's separate property and debts 6. The standard of living during the marriage 7. Tax consequences of any proposed division 8. The desirability of awarding the marital home to the parent with primary custody 9. Wasteful dissipation of marital assets (gambling, affairs, hiding money) 10. Any prenuptial or postnuptial agreement ## Retirement accounts and QDROs Retirement accounts (401(k), pension, IRA) earned during the marriage are usually divisible. To split a 401(k) or pension WITHOUT triggering early-withdrawal penalties or tax, you need a **Qualified Domestic Relations Order (QDRO)** — a separate court order issued to the plan administrator. IRAs use a simpler "transfer incident to divorce" mechanism. Don't withdraw retirement funds without proper paperwork — the tax and penalty hit can be brutal. ## What you should do Property division is where divorces get expensive — and where the biggest mistakes happen. Even a "simple" division can have hidden tax consequences (basis issues on real estate, embedded gains in retirement accounts) that play out years later. A Vermont family-law attorney plus, in some cases, a CPA or financial planner can save you far more than they cost. Most attorneys offer paid initial consultations. --- *This guide is general information about Vermont law as of early 2026 and is not legal advice. Property-division law has many edge cases (transmutation, appreciation of separate property, business valuation, embedded tax) that change the analysis. Talk to a licensed Vermont family-law attorney about your specific situation.*