Alimony Substitution Trust

(redirected from Alimony Substitution Trusts)

Alimony Substitution Trust

An agreement between two divorced or divorcing spouses whereby the one paying alimony deposits assets into a trust and, rather than paying alimony directly, pays their spouse income that the assets generate. An alimony substitution trust is taxed slightly differently from regular alimony. Specifically, assets placed in the trust are not tax deductible.