A prenuptial agreement “prenup” is a contract created before marriage and specifies what each party’s property rights will be after the marriage. A postnuptial agreement is similar to a prenup but it is created after the marriage has taken place. Many mistakenly believe that these agreements are only for the rich fiance or spouse. However, many couples can benefit from these agreements even if they are not rich. For example they can be used to clarify who will own a family property inherited by one of the parties after death. They can also be used to protect from the other spouse’s financial debts such as school loans and credit cards. Couples should also include their assets and debts in the agreement. If these are not fully disclosed prior to creating the prenup, there is a possibility that a court could rule that the agreement is invalid.
Many believe that these agreements are red flags but they can serve to protect the finaincial interests of both parties when carefully crafted. Prenups can also save the parties from a contentious court battle down the road in the unfortunate event of a divorce.
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