Maintenance Is Not a Substitute for Treating a Defined-Benefit Pension as Marital Property

Case: Brian Clifford v. Shauna Clifford (Vt. Sup. Ct., Mar. 14, 2025) — Entry Order (three-justice panel; noted as nonprecedential).

1. Introduction

This divorce appeal arises from a long marriage (1995–2021) between Brian Clifford (“husband”) and Shauna Clifford (“wife”), with no children. The parties accumulated real property, personal property, debt, and—centrally—wife’s state-employee retirement benefits: a substantial deferred-compensation account and a defined-benefit plan (which wife described as essentially a pension).

Husband appealed the final divorce order, challenging (among other issues) the trial court’s decision to award him a share of wife’s deferred-compensation account but no share of her defined-benefit pension, on the rationale that maintenance was being awarded instead. The Vermont Supreme Court vacated the property division and the interrelated maintenance award and remanded.

2. Summary of the Opinion

The Court held that the family court abused its discretion by “essentially exempt[ing] wife’s pension rights from the marital estate” even though it found that “the majority of those rights accrued during the parties’ lengthy marriage.” The trial court’s citation to 15 V.S.A. § 751(b)(7) (allowing consideration of whether a property settlement is “in lieu of or in addition to maintenance”) was not enough, standing alone, to justify excluding the pension from distribution.

Because property division and maintenance are “closely related,” the Supreme Court vacated both awards and remanded for further proceedings. The Court did not reach husband’s other appellate issues.

The Court also rejected wife’s preservation argument, explaining that husband’s position below effectively sought an “offset” distribution approach and did not waive the claim that the pension had to be included in the marital estate.

3. Analysis

A. Precedents Cited

• Jaro v. Jaro, 2018 VT 105, ¶ 13, 208 Vt. 391: The Court restated the appellate standard: it reviews whether the family court adequately explained its rationale and will not disturb it absent an abuse of discretion. This framed the analysis as a “reasoned explanation” problem as much as an outcome problem.
• Bell v. Bell, 162 Vt. 192, 197-98 (1994): Reinforced deference to trial courts in divorce awards—while underscoring that reversal is appropriate when there is “no reasonable basis” for the award.
• Milligan v. Milligan, 158 Vt. 436, 439 (1992): Provided the governing principle that pension rights acquired during marriage are marital property subject to equitable distribution. The Court used this as a direct answer to the trial court’s effective exclusion of the pension.
• McDermott v. McDermott, 150 Vt. 258, 260-61 (1988): Supplied the conceptual framework for dividing unmatured pension rights (immediate-offset vs. deferred distribution) and required determining the marital portion via the “coverture fraction.” The Court relied on McDermott both to explain the “problematic” nature of pension division and to rebut wife’s preservation argument (husband’s request aligned with the offset method).
• Hayden v. Hayden, 2003 VT 97, ¶¶ 8-9, 176 Vt. 52: Emphasized that even though courts have discretion in distributing pensions, they must consider them as part of the marital estate and explain the basis for their disposition. The Court analogized the present failure—pension omitted from the distributable estate—to the error in Hayden.
• Sachs. v. Sachs, 163 Vt. 498, 502-03 (1995): Recognized a pension’s dual role: it can be a marital asset and also a post-retirement income stream relevant to maintenance. The Court used this to show that “maintenance” and “property” analyses overlap but must still be done coherently.
• Molleur v. Molleur, 2012 VT 16, ¶ 6, 191 Vt. 202 (quoting Mayville v. Mayville, 2010 VT 94, ¶¶ 9-11, 189 Vt. 1): Reinforced that pension income is important in maintenance determinations and that the family court may consider income from assets distributed in the property award. The Court contrasted this guidance with the trial court’s maintenance analysis, which did not reflect any consideration of wife’s pension income.
• Scott v. Scott, 155 Vt. 465, 472 (1990): Used as a cautionary example: overreliance on a single factor in 15 V.S.A. § 751(b) without a broader analysis can be an abuse of discretion. Here, reliance on § 751(b)(7) alone did not adequately support excluding the pension.
• Jakab v. Jakab, 163 Vt. 575, 585 (1995): Reiterated the need for a “clear statement” of what was decided and why, even if the court need not assign weight to each statutory factor. The pension’s omission from the distributable estate, with minimal explanation, violated this requirement.
• Downs v. Downs, 154 Vt. 161, 168 (1990): Supplied the remedial rule: because property division and maintenance are closely related, vacating property division often requires vacating maintenance as well to permit recalibration on remand.

B. Legal Reasoning

The Court’s reasoning proceeds in three connected steps:

1. Classification: Wife’s defined-benefit plan is a pension right, and Vermont law treats pension rights acquired during the marriage as marital property. The family court’s own findings established that most of the pension accrued during the marriage.
2. Distribution and explanation: While the family court has discretion over how to distribute a pension (e.g., immediate offset or deferred distribution), it must still (a) include the pension within the marital estate framework and (b) explain its disposition. Here, the pension was omitted from the property-division table and effectively carved out of the marital estate.
3. “Maintenance instead” was not a sufficient justification on this record: The trial court cited 15 V.S.A. § 751(b)(7) and stated it was not awarding any pension share because it was awarding maintenance. But the Supreme Court found this inadequate because (a) it was not supported by a broader equitable distribution analysis and (b) the maintenance analysis did not reflect consideration of the pension as future income—suggesting the pension was neither properly distributed as property nor integrated as an income source for maintenance.

Finally, the Court addressed preservation: wife argued husband had not sought access to the pension because he could not draw on it until wife retired. The Court treated husband’s position as a request for an “offset” (awarding the pension to the employee spouse and compensating the other spouse with other marital property), which preserved the issue.

C. Impact

Although labeled a nonprecedential entry order, the decision is a clear warning to family courts and practitioners about common retirement-asset errors:

• No “pension carve-out” by shorthand: A court cannot simply say “maintenance is awarded, so the pension stays with the employee spouse” without a reasoned analysis showing how equity is achieved and how the statutory factors support that outcome.
• Property and maintenance must be internally consistent: If a pension is excluded from property distribution because it will function as income relevant to maintenance, the maintenance analysis should transparently reflect that pension income (at least conceptually, and where appropriate quantitatively).
• Remand consequences: When the pension piece is mishandled, both the property distribution and maintenance are at risk because they are “closely related.” This raises the practical stakes of getting retirement treatment correct at the trial level.
• Litigation strategy: The preservation discussion encourages parties to frame requests clearly in terms of recognized pension-division methods (especially “offset”) rather than assuming an unmatured pension is unreachable and therefore unaddressable.

4. Complex Concepts Simplified

• Defined-benefit plan (“pension”): A retirement benefit typically paying a set monthly amount based on years of service and salary formulas—often payable only after retirement.
• Deferred-compensation account: A retirement savings account with an identifiable current balance (like a 401(k)-type account), typically easier to value and divide at divorce.
• Equitable distribution: Division of marital property in a manner that is fair under statutory factors; it is not necessarily equal.
• Immediate-offset method: The court assigns a present value to the pension, awards the pension to the employee spouse, and “offsets” the other spouse’s share with other property.
• Deferred distribution / reserved jurisdiction: The court waits and divides pension payments when they begin (e.g., awarding a percentage of each payment).
• Coverture fraction: A formula used to determine what portion of a pension was earned during the marriage (marital years of service ÷ total years of service).
• Maintenance (alimony): Ongoing payments from one spouse to the other based on need and ability to pay; distinct from dividing property, though the analyses can affect each other.

5. Conclusion

Brian Clifford v. Shauna Clifford reinforces a basic but frequently litigated principle of Vermont divorce law: pension rights earned during the marriage are marital property that must be considered in the property division and addressed with a clear explanation. A court may consider how maintenance and property division interact (including under 15 V.S.A. § 751(b)(7)), but it cannot use maintenance as a standalone rationale to exclude a defined-benefit pension from the marital estate—especially where the court’s findings show the pension largely accrued during the marriage and the maintenance analysis does not meaningfully account for the pension as future income. The result was a full vacatur of both property division and maintenance, underscoring the practical importance of coherent, transparent treatment of retirement assets.