Alimony Trust

If you get divorced, you might be required to pay alimony (See: Alimony Payments). Don't get mad at your lawyer...these things happen. (And um, keyword: Tinder.)

However, you don't want the hassle of having to write a check every month to cover the alimony payment. So instead of just paying cash out of your bank account every month, you decide to set up an alimony trust.

Basically, you transfer some assets to a trust that is run for the purpose of paying off the alimony. The alimony payments are paid out of the trust, either from income generated by assets in the trust, or from the principal.

There are costs associated with managing the trust, but if there is enough money involved, these additional costs become relatively small. (If you got your lawyer's name from an ad you saw at a bus stop, an alimony trust might not be be for you.)

Meanwhile, potential tax benefits associated with an alimony trust can help offset the costs. Also, the trust can be used to protect assets, and it might fit into a larger estate planning strategy.

But maybe the most attractive benefit comes from the fact that the trust puts a buffer between you and your former spouse, especially if you two are still beefing over the divorce. You can communicate through the trustee and not deal directly with each other regarding any issues with the alimony. If only figuring out child custody were so easy.