Guide to pre-civil partnership agreements
Since the Civil Partnership Act in December 2005 came into force, civil partnerships have granted same-sex couples the same legal rights as heterosexual married couples. The process of dissolution and the financial consequences of dissolution are therefore identical to those of marriage and are equally significant. It is highly recommended that same-sex couples enter into pre-civil partnership agreements irrespective of their individual wealth or the complexity of their individual circumstances. As with prenuptial agreements, pre-civil partnership agreements enable same-sex couples to discuss and agree how their assets shall be divided, and their children provided for in the unfortunate event of a relationship breakdown. Experience tells us that an agreement, made at the beginning of a happy and cooperative relationship is a far better alternative to the unpredictability, pain and cost of litigation that can follow an unhappy one.
In the event that the court is asked to look at making financial provision for each party upon the separation of a civil partnership, as with divorce, the general approach will be to evaluate the assets acquired during the partnership and to divide these assets in a manner that the court considers fair. If the needs of either party cannot be met by such a division of partnership assets, then the court will look to the non-partnership assets, such as the inheritance and assets acquired prior to the partnership, of the wealthier party in order to meet the needs of the other. Needs are generously interpreted where there is the wealth to do so.
You can expect that a pre-civil partnership agreement duly executed with legal advice on both sides and with full financial disclosure to be upheld by the courts provided that the agreement remains fair in the circumstances at the date of enforcement. The Supreme Court in the landmark case of Radmacher v Granatino did not define the term “unfair” but, as the case law in this area has developed, fairness is interpreted as meeting the parties’ reasonable needs. These needs can be restricted by a pre-civil partnership agreement. It is important to ensure that it remains fair in light of the parties’ changing circumstances.
The discretion of the courts has not been ousted altogether (and in particular the court has jurisdiction to make provision for children, which cannot be ousted). However, the Supreme Court has gone a long way to redress the balance of power between the people and the courts by allowing people autonomy to make decisions in respect of their own finances in the event of relationship breakdown. This is an extremely valuable change to the law of England and Wales and has brought us closer in line with many other countries where such agreements are already binding, and in some cases, have been for many years.
If you are interested in discussing a pre-civil partnership agreement please see How Vardags can help with pre-civil partnership agreements.