Divorce is challenging on every level, but the financial aspects often create the most lasting impact. For government employees, going through a divorce involves specific considerations: retirement accounts, pensions, health benefits, and predictable salary structures, all which have a significant role. Knowing how to protect your financial future and selecting the right family law attorney in the Baltimore area during this process is important.
Whether you work for a federal, state, or local agency, here are five practical financial tips to help you move through your divorce with more clarity and control.
1. Understand the Value and Division of Your Pension
One of the most valuable assets in a government employee’s portfolio is the pension. In Maryland, pensions earned during the marriage are generally considered marital property. This means your spouse may be entitled to a portion, even if you’re not yet receiving benefits.
If you are a federal employee, your retirement benefits may fall under the Federal Employees Retirement System (FERS) or the older Civil Service Retirement System (CSRS).
These benefits can be divided through a court order known as a Court Order Acceptable for Processing (COAP). This is similar to a QDRO (Qualified Domestic Relations Order), which is used in private sector plans.
It’s important to:
- Know the current value of your pension
- Understand how much of it is considered marital property
- Work with a family law attorney to help guarantee the division is fair and legally sound
A misstep in this area can lead to unintended financial loss down the line
2. Don’t Overlook the Thrift Savings Plan (TSP)
If you’re contributing to the Thrift Savings Plan, it’s considered another marital asset that may be subject to division. As with a 401(k), the TSP can be split based on a court order.
You should determine:
- How much was contributed during the marriage
- Whether loans were taken out against the account
- How the TSP will be divided or offset with other marital assets
The TSP website offers detailed guidance on how this works in the context of divorce.
3. Reevaluate Your Health Insurance and Benefits
One of the more overlooked financial aspects of divorce is the shift in health insurance coverage. Government employees often carry their family’s health benefits through the Federal Employees Health Benefits (FEHB) program or a state-level equivalent.
After a divorce:
Your ex-spouse is no longer eligible for coverage under your plan- Children may still be covered, but the details depend on custody arrangements and support orders
- Your ex-spouse may be eligible for Temporary Continuation of Coverage (TCC), but that coverage is limited in time and more expensive
Be sure to update your benefits enrollment promptly and review any changes to your payroll deductions.
4. Create a Realistic Post-Divorce Budget
Government employees typically have stable incomes, but that can also make budgeting after divorce more rigid. A divorce often introduces new expenses, such as spousal support, child support, or splitting one household into two.
As you build a new financial plan:
- Factor in all potential support payments
- Review changes to your retirement contributions or loan repayments
- Be conservative in taking on new debt
Consider using budgeting tools or consulting a financial advisor who understands family law dynamics. The Consumer Financial Protection Bureau offers helpful resources for rebuilding after major life transitions.
5. Work with a Family Law Attorney Who Understands Government Benefits
Not all divorce attorneys are familiar with the nuances of federal or state employee benefit structures. Working with a family law attorney who has experience helping government workers in Maryland can make a major difference for your financial and personal outcomes.
Your attorney can:
- Properly value and divide pensions and TSP accounts
- Draft accurate court orders that are accepted by agencies like OPM
- Protect your financial interests during property division and support negotiations
- Help modify existing orders if workplace changes (including a return to office) affect your income or childcare needs
In Maryland, where family law is complex and asset division must meet equitable distribution standards, having the right legal guidance is essential.
Milstein Siegel Helps You Divorce with Financial Confidence
Divorce affects every aspect of life, and for government employees, the stakes can be especially high when it comes to financial planning. Your pension, retirement savings, and even your work benefits are all pieces of the puzzle. With the right preparation and professional support, it’s possible to work through this chapter without losing your financial footing.
If you’re a government employee in the Baltimore area and going through a divorce, Milstein Siegel can help. An experienced family law attorney in the Baltimore area will understand the unique challenges public workers face and will work with you to protect what matters most. Contact us today to schedule a consultation.