While some of the formalities are different, when it comes to dealing with financial disputes arising from the dissolution of a civil partnership, the same principles apply as would on divorce, says our head of family law David Anstee.
Full and frank disclosure of assets and liabilities
It is important each partner discloses their financial assets and liabilities before any advice is possible on how the assets are likely to be divided. This is known as making a ‘full and frank’ disclosure. It will normally entail providing copies of bank statements, pay slips, savings accounts and any stocks or shares you have as well as any credit cards or other debts. It will be necessary to obtain a valuation for any land or properties owned, whether in one partner’s sole name or in joint names, as well as an up-to-date valuation of pensions.
Once all of your information is together it will be necessary to exchange this with your partner’s solicitor, and then settlement discussions can start.
The next step is to consider what is in the ‘pot’ and how this should be dealt with. There is no set formula for how assets are divided and each case will turn on its own circumstances, but the starting point is equality.
A number of factors will be taken into account which may shift the division in favour of one partner. For example, the length of the relationship including any period of cohabitation prior to the civil partnership. It will be easier to argue that a 50/50 division is unfair in a short-term partnership where one partner contributed significantly more financially.
Other factors will also be reviewed, such as the standard of living enjoyed, ages and earning potential. If either partner has a disability, they may be entitled to a larger portion of the assets. The housing needs of minor children will be assessed and the parent who resides with the children may be entitled to a larger portion of the equity in the family home.
You may have already discussed with your partner how you wish to divide assets, or you may be keen to try to reach an agreement with your partner via negotiation through your solicitor. Either way, it is possible to reach an agreement without having to apply to court.
It is vitally important any agreement reached is legally binding to ensure your assets are protected now and into the future. To achieve this, both you and your partner will need to have independent legal advice so you are fully aware of the extent of assets and liabilities held by each other and your entitlements.
After receiving advice, if you wish to continue to enter an agreement with your partner, your solicitor will draft a contract, sometimes known as a separation agreement, to reflect the settlement terms. You will both be required to sign this before it can be formalised by the court to produce a consent order or a clean break order.
If you are unable to reach agreement, your solicitor will advise you on the routes via mediation and court. Before you can issue any court proceedings you will be expected to attend a preliminary mediation session (known as MIAM) which involves both of you meeting with a trained mediator to discuss your options and future. It is not aimed at rekindling the relationship but at trying to reach an agreement on how best to finalise the partnership.
If mediation is unsuccessful or not appropriate, the only remaining option may be to proceed to court where a judge will decide how your assets will be divided. The judge will insist a full and frank disclosure of assets and liabilities is made, and if either of you refuses to do so, the party refusing will likely be heavily penalised in costs by the court.
Court proceedings can be expensive, so as soon as you are considering a dissolution of your civil partnership it is best to seek legal advice. This will give you the optimum chance of resolving matters in a cost-effective and timely manner.
Call David Anstee on 0208 979 1131.