A pre-nuptial agreement, sometimes called “pre-marital agreement” or “prenup”, is an agreement between prospective spouses about how they will own their property during marriage and how they would divide that property should the marriage end. These agreements could also cover the issues of child and spousal support as well as other family law issues.
A post-nuptial agreement, also called “postnup”, is an agreement similar to pre-nuptial agreement except that it is entered into by the spouses of the already existing marriage.
Why sign a pre-nuptial agreement?
There are two main reasons in which the prospective spouses can benefit from having a pre-nuptial agreement. First, the process of creating this agreement allows them to discuss and share their expectations about finances and how to handle them. This helps the couple to set ground rules for their soon-to-be shared financial life and to minimize potential future disagreements about money in a divorce.
The second reason for signing prenup is similar to a reason for obtaining a life insurance. No one gets a policy because he or she plans to die in the near future. In fact, most people get life insurance hoping to never have to use it. But just as life insurance serves as security for the possibility of a future catastrophic loss, so does the prenup. Properly drafted pre-nuptial agreements save both litigation costs and emotional anguish and allow each prospective spouse to know exactly what to expect.