The gay and lesbian community may have cheered loudly in December 2005 when civil partnerships finally allowed them to celebrate their union officially. 6, 516 couples had formed civil partnerships in England and Wales by 31 March 2006  - but the old adage of repenting in leisure applies just as much to same-sex partners as it does to anyone else. For some, the first partnership anniversary could be less a cause for celebration than a reason to regret their decision. So what are the implications now for couples in a civil partnership who find their partner is less than civil - and now wants out?  Dissolution of a civil partnership will have both legal and financial impact as we explain below.

Dissolving in tears

The break-up of a civil partnership is known as dissolution rather than divorce.  To-date, there have been no reported cases of dissolution because, as with divorce, a year must pass before dissolution can take place. Indeed, it will be interesting to observe what grounds do eventually emerge as the most common for dissolution, and the first application for dissolution is likely to attract much publicity - particularly if it involves one of the first celebrity couples to take advantage of civil partnership, such as Elton John and David Furnish!

Grounds for dissolution include unreasonable behaviour or two years' separation, although not adultery.  So anything we see in 2007 would have to be on the grounds of behaviour. 

Legal rights

When a couple enters into a civil partnership, as with marriage, they need to understand that this is not simply a romantic gesture and an excuse for someone  to declare their love for their partner to the world.  Civil partnership confers certain rights and obligations on each party which need to be considered carefully before signing an agreement. 

Of course it's all new to the judges as well, and they will have to feel their way in deciding how to interpret legislation, and to what extent civil partnerships should in practice be treated in the same way as marriage.

For example, in the case of dissolution, assets acquired jointly between the couple may have to be split equally between them if they are to be treated in the same way as a heterosexual married couple. Each partner's contribution to the household, the grounds for dissolution and length of the partnership (though whether this would include time before December 2005 when the registrations were first allowed is subject to some debate) may be taken into account. In the worst case scenario, a rich partner could find himself  or herself distinctly worse off if a civil partnership were dissolved and he or she had to fund a stay-at-home partner's lunching lifestyle. And it's as well to remember the worst that can happen before making a final decision.

Taking charge of children

Where children are involved in a same-sex partnership, the issues become even more clouded. Child support arrangements would almost certainly be decided by the courts and would depend on whether the child was natural offspring of either party from a previous opposite sex union, adopted into the civil partnership, or conceived using sperm donated from one partner, and therefore the biological child of one half of the couple.

If a child is deemed by a judge to be what is known as a 'child of the family', e.g.  the child has spent significant periods of time at the same sex couple's home and they have been directly involved in the child's welfare and upbringing, dissolution of the partnership could leave either party liable for child maintenance payments. 

Again, it is very early days when it comes to dealing with these untested cases, and it is therefore impossible to predict with any degree of accuracy, how they would be judged.  The advice has therefore been to proceed with caution, and never assume that the possibility of a dissolution will absolve either party of their responsibilities towards any children of the partnership.

Planning the finances

Most people of course enter into marriage or a civil partnership because they love their partner and believe the union will last. Discussing financial provision in the case of dissolution may not seem appropriate just at the time that finances are being pooled and assets are being shared. However, this is a very good time to review financial planning - and it needn't all be negative. 

If the union does last the course, the couple will want to have plans in place to fund a comfortable retirement or to reduce inheritance tax liabilities. Wills should be updated at this point, too, to ensure the surviving partner is properly provided for in the case of death.

Civil partnerships mirror marriage in many respects, which means impact on tax credits and income related benefits.  This is a good time to review your entire finances with an independent financial adviser to ensure that you are not missing out on any changes which could positively affect your financial position.

Of course, there will be some partnerships that do end in dissolution for whatever reason.   While no one wants to think about this possibility at the time of entering into ‘'official'' partnership, that is exactly the time to protect assets if the union should unfortunately break down.

In fact, same sex couples, who prior to December 2005 had no option beyond living together, are more likely to have thought about financial independence than opposite sex couples who could marry and avail themselves of automatic protection.  With no recognition of their status in law, they were far more vulnerable in the case of the relationship breaking up and had to make their own plans to protect their security.

Regular review of your financial planning can reap dividends by making the most of different regulations, new products on the market, and your own changing needs as you get older.  It can also ensure a guaranteed source of income is not an added stress if the partnership does break down.

Conclusion

While civil partnerships have been warmly welcomed by the gay and lesbian community since they allow same sex couples to put their relationship on a legal footing, it won't be long before the first cases of 'divorce', or dissolution, start to hit the headlines. With these will come the same issues that currently affect opposite sex couples, such as division of assets, maintenance payments and child support.  With no precedent to determine how each case is likely to be judged, the most sensible course of action has to be to take sound legal and financial advice before entering into a civil partnership.  By all means embrace the new law (as well as your partner!)  that makes a legal union possible - but make sure you protect your assets before you do.