Alimony Substitution Trust

Definition of "Alimony substitution trust"

Agreement in which spouse X (the spouse who is mandated by the court to make alimony and/or child support payments to spouse Y) must put assets (the principal) in a trust, from which the payments are made to spouse Y. Under this trust, the payments made from the income generated by the principal is taxable income to spouse Y, but any sums paid from the corpus of the principal is not taxable income to spouse Y. Spouse X does not receive a tax deduction for payments made from the trust's corpus of principal, nor does spouse X pay income taxes on the income generated by the principal in the trust.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Standard property/casualty insurance premium set by a state rating bureau. States have responsibility for regulating insurers and making certain that rates are reasonable. To this end, ...

Contribution whose purpose is to increase funding of underfunded pension plans. It is part of the calculation that is made to arrive at the plan's minimum funding requirement. Usually a ...

Insurance company's promise to insure particular risks. ...

Provision in commercial property coverage under which an insured must report the value of an insured property at periodic intervals in order to preserve coverage up to values reported. In ...

Authority derived from an agent's contract with an insurance company. ...

Maximum amount that an insurance company will pay under a liability insurance policy for bodily injury incurred by any single person as a result of any one accident. ...

Employee benefit program that emphasizes the pursuit of a lifestyle that minimizes the occurrence of sickness through an organized program of preventive medicine. Such a program includes ...

Coverage through an endorsement to the personal automobile policy (pap) to extend its protection against accidents within a 25 mile radius of the U.S. border. This coverage is excess over ...

Intense combustion resulting in a flame or glow. In order for the fire peril to be covered under property insurance, the fire must be a hostile fire, not a friendly fire. ...

Popular Insurance Questions