Section 16.19 Stream of Payments Qualified Domestic Relations Orders

• Library: Family Law Deskbook and 2014 Supp

a. (§16.19) Stream of Payments Qualified Domestic Relations Orders

A “stream of payments” is typically the choice made available to the alternate payee when the alternate payee’s interest cannot be paid out in a single “lump-sum” form of payment and the participant has already commenced receipt of monthly retirement benefits. In most cases, the stream of payments method of division is evidenced by a monthly annuity benefit, such as those benefits payable from a pension plan. In almost all cases of a QDRO dividing a defined benefit pension plan in which the participant has commenced receipt of retirement benefits, a stream of payments QDRO is typically the only choice available. Essentially, the alternate payee’s interest is “carved out” of the benefits already in pay status. With respect to defined contribution plans, a stream of payments QDRO is often an option at the choice of “the alternate payee. But because many defined contribution plans (typically profit sharing or 401(k) plans) offer a lump-sum or other similar distribution option to the alternate payee, a stream of payments QDRO is not typically employed within the context of defined contribution plans.

In most cases—except in the case of the...