Yannis Constantine
The Civil Partnership Act 2004 (the ‘CPA’) came into force last year, on 05 December 2005. The new Act gave same sex couples the right to register their relationships and, for the first time in England and Wales, obtain the same rights and responsibilities as married couples.
In the area of wills, administration of estates and family provision, those clients who are partners or dependants of same sex persons should be aware of the changes brought by the CPA. The most important of these changes are:
1. Effect of a new civil partnership on a will
If a person enters into a civil partnership, his/her will shall be automatically revoked when the partnership is formed. This means that the will is treated as if it never existed. Therefore, the CPA presumes that a civil partnership, like a marriage, is an event so fundamental that it erases all of the civil partner’s testamentary wishes prior to the formation of the civil partnership.
An exception to this rule is where the will contains sufficient evidence that the maker of the will, when signing it, was expecting to form a civil partnership with a particular person and that he or she intended that the will should not be revoked by the formation of the civil partnership.
Another exception is where a power of appointment arises. A power of appointment is sometimes contained in a will and allows the holder of the power to distribute designated property to anyone (general power of appointment) or among a certain group or class of people (specific power of appointment). It is therefore discretionary in nature. Where a person receives a gift under a will in exercise of a specific power of appointment, the gift takes effect despite the formation of a subsequent civil partnership between the testator (the person who left the will) and another person.
2. Effect of dissolution or annulment of a civil partnership on a will
A civil partner may have left a will, but, after the will was made, a court may have dissolved his/her civil partnership or erased it (by way of an annulment order; for example, due to some illegality). In this case, unless some contrary intention appears in the will, any property or interest given to the former civil partner shall be ignored and pass as if the former civil partner was dead.
Similarly, any provisions in the will appointing the former civil partner as an executor or trustee (or granting to him a power of appointment) will not take effect, unless the will contains evidence of a contrary intention.
This provision does not affect any right of the former civil partner to apply for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975 (see below).
3. Civil Partnership Act and the rules of Intestacy
If a person left no valid will or if the will does not dispose all of his/her estate, the rules of intestacy will apply. If this happens, the Civil Partnership Act ensures that civil partners are treated in the same way as spouses. On the contrary, like unmarried couples, cohabiting same sex couples are not recognized under the rules of Intestacy.
Provided that a civil partner survives his/her late partner by 28 days, his/her entitlement under the rules of intestacy will be as follows:
- The deceased died intestate or party intestate, without children, no siblings and no surviving parents. In this case, the surviving civil partner is entitled to receive all of the estate.
- The deceased was survived by his/her child. In this case, the surviving civil partner will get a fixed sum of 125,000 (plus interest), his late partner’s personal belongings and a beneficial interest for life in half of the remaining estate (which can be exchanged for money). The interest in the other half of the remaining estate will pass to the child of the deceased (or to his/her child if he or she did not survive his/her parent).
- The deceased was survived by his parents but had no surviving children. In this case, the surviving civil partner will receive a fixed sum of £200,000 plus interest, his/her later partner’s personal belongings and half of the remainder of the estate. The surviving parents will receive the other half of the remainder.
- The deceased was survived by his siblings but had no issue and no surviving parents. In this case the surviving civil partner will get a fixed sum of 200,000 (plus interest), his/her late partner’s personal belongings and half of the remaining estate. The interest in the other half of the remaining estate will pass to the siblings of the deceased (or to their children if they did not survive the deceased).
It is important to note that if the surviving civil partner owned any property jointly with the deceased, this will fall outside the estate. The surviving partner is automatically entitled to it by reason of his joint tenancy. The same applies with any benefits assigned directly to the surviving partner by his/her late partner e.g. a right to receive a benefit under a pension or a life assurance policy.
On the other hand, if the deceased owned the civil partnership home on his/her own, the surviving civil partner is entitled to ask the administrators that the home be passed to him/her in exchange of deleting his interest in the estate. However, if his/her original interest in the estate was worth less that the value of the civil partnership home, he or she will have to pay a balancing sum.
Applications for financial provision outside the Will or the Rules of Intestacy
Provided the deceased was domiciled in England or Wales at the time of his/her death, some clients may be able to apply at Court for reasonable financial provision out of the estate, if not provided for (or not adequately provided for) under a will (or the rules of intestacy). Such claims are made under the Inheritance (Provision for Family and Dependants) Act [I(PFD)A]1975.
Unreasonable financial provision is the only justifiable ground to bring a claim. Importantly, an applicant must bring his/her claim within six months from when probate or administration of the estate was granted. In limited cases, this time limit can be extended, but the burden is on the applicant to show that an extension is in the interests of justice.
The CPA has made it much easier for same sex partners and their dependants to qualify under the I(PFD)A. Provided they satisfy certain criteria laid by law, civil partners, former civil partners, cohabiting civil partners, children of the deceased (or persons treated as children by the deceased), all are entitled to apply under the I(PFD)A.
An order for reasonable financial provision can be capital and maintenance for civil partners. However, a claim by an applicant within any of the other categories is limited to maintenance only. This is particularly important for some former civil partners who, if they satisfy certain criteria, can be treated as existing civil partners. In that case they will be eligible to receive both capital and maintenance, if the Court thinks fit. The criteria are that the former partnership must have came to an end within 12 months of the deceased’s death, that the former partner did not apply for (or received no decision on an application for) financial relief and that he or she did not enter a subsequent civil partnership.
In deciding all claims the Court must examine (as at the date of the hearing) a number of factors including:
- the financial resources and financial needs which the applicant has, or is likely to have in the foreseeable future (which includes an assessment of the applicant’s prior standard of living in the relationship);
- the financial resources and financial needs which any beneficiary of the estate of the deceased or other applicant has or is likely to have in the foreseeable future;
- any obligations and responsibilities which the deceased had towards any applicant or towards any beneficiary of the estate of the deceased (this includes moral considerations);
- the size and nature of the net estate of the deceased;
- any physical or mental disability of any applicant for an order or any beneficiary of the estate of the deceased;
- any other matter, including the conduct of the applicant or any other person
- the age of the applicant and the duration of the marriage;
- the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family.
The above list of factors is not exhaustive. Where the application concerns a child of the deceased (or a person treated as a child by the deceased) additional factors apply by law.
It should be noted that although the Court may consider any foreign property in deciding the question of an applicant’s reasonable financial provision, the Court nevertheless may have no power to make a final order affecting foreign property. On the other hand, where domestic property is held by joint tenants, the court has the power to order that the property should not pass to the surviving joint tenant, but that is should fall into the estate of the deceased for the purpose of an I(PFD)A claim. However, for the Court to decide this, an application must be made within six months from when probate or administration of the estate was granted.
If the Court is satisfied that reasonable financial provision should be made, the Court can make any order it thinks fit. The Court can chose from a wide range of orders at its disposal. These include a periodical payments order, a lump sum order, a transfer of property order or an order to vary a settlement made by the civil partners. The Court also has the power to make an interim payments order until proceedings have been concluded.
For further information contact a member of the Family & Divorce Law team or call 020 7940 4000.
