Continuing in our series of questions linked to Financial Planning, this quarter’s issue is civil partnerships.

This December close to 2000 same sex couples across the UK will mark their second year together as civil partners. When the Civil Partnership Act came into force on December 5 2005, it created a new legal relationship that granted same sex couples many legal rights and responsibilities equivalent to those that apply to married couples.

Just like a marriage, many of these rights are automatic on registration of the civil partnership, for example, recognition of a civil partner as next of kin.

And just like a marriage, sometimes the excitement of the occasion can cause the two parties to forget that there are important legal and financial planning issues that require urgent attention and action by both partners.

In entering a civil partnership, any wills that previously existed for either party are voided in England, Wales and Northern Ireland unless they were drawn up "in contemplation" of a civil partnership (Scottish wills are not treated in this way), so new ones must be drawn up to avoid intestacy issues which are complicated, time consuming and often expensive to administer.

Additionally, like married couples, civil partners are only entitled to one main residence under capital gains tax rules, though the transfer of assets between partners is exempt from capital gains tax. Civil partnerships are also treated like married couples for the purposes of taxation.

As with married couples, should a civil partnership end in a ‘dissolution’ or an annulment, the court may require the payment of maintenance for a civil partner and child support for any children in the family unit.

A pre-nuptial agreement will only afford limited protection. If a civil partnership is later dissolved or annulled, the UK courts may consider the contents of any agreement, but ultimately they have overriding powers in the interest of fairness. A partner may find it possible to protect him or herself through the use of certain trust arrangements, but again the courts have wide powers to circumvent these if they feel it is necessary.

But taking a positive view on the future of any civil partnership, ensuring an adequate pension provision is one of the most important financial planning issues that needs to be addressed to ensure couples enjoy a "happy ever after."

As with married couples, civil partnerships need to review their future retirement requirements and make sure there is enough money going into their joint pension.

Often when couples review their pensions pot, the focus is on the lesser income earner and how much he or she needs to increase pensions savings by. However, any pensions saving may be better invested by the main earner. There are four key points which need to be considered by anyone entering into a civil partnership:

Wills – Ensure both clients have an up-to-date will that takes into account changes resulting from upcoming or recent nuptials.

Pensions – Check to see whether pensions planning provisions are adequate and make the most of tax relief.

Inheritance Tax – The ‘spouse’ and ‘gifts in consideration of marriage’ exemptions cover civil partnerships. This means that some inheritance tax (IHT) planning will no longer be necessary. However, if either partner has children, IHT planning may need to be addressed via trusts.

Location - Are the civil partners planning to retire or live abroad? While the UK recognises civil partnerships or their equivalent formed in other countries, not all countries do recognise UK civil partnerships (even if the country has similar legislation). If civil partners are planning to move abroad to work or retire this must be checked and addressed to ensure tax and/or intestacy issues are identified in advance and resolved under the country’s relevant laws.