The 10 consequences of civil partnerships (PACS)?
Would you like to enter into a PACS? What are the advantages of PACS? What are the consequences of PACS on your personal and financial situation?
Understanding the consequences of PACS
1. You must help each other financially and live together
As partners, you must provide each other with mutual and material support. You can specify in your PACS contract how each of you will help the other financially. If you entered into your PACS after January 1, 2007, you must live together.
2. PACS does not allow you to adopt a child together
Two people must be married to adopt a child together. Cohabitees and PACS partners cannot adopt a child together. If you wish to adopt while in a PACS, only one partner will be able to adopt a child.
3. You retain ownership of your property unless you stipulate otherwise
If you owned property before entering into the PACS, you retain ownership of that property.
If you purchase property on your own after the conclusion of the PACS, you are the sole owner of that property. Likewise, if you inherit certain assets, they will remain your property.
On the other hand, if you buy property with your partner, you will be in joint ownership of that property.
The sums you receive during the PACS remain your property, and your partner has no right to them. You can stipulate in the PACS agreement that certain property acquired even by just one partner will belong equally to you and your partner, in this case it will be called an undivided asset. If you have joint ownership of a property, you can ask for it to be divided up at any time.
4. You are not jointly and severally liable for debts
If your partner incurs a debt, you will not be jointly liable with him or her for payment of that debt, and creditors will not be able to sue you. The only exception to this principle is in the case of individual debts incurred for day-to-day living needs (excluding housing expenses), for which you will be jointly and severally liable with your partner.
5. You have rights to the home you live in with your partner
If your partner dies, and you are living in his or her apartment, you have the right to live in the apartment free of charge for one year. If you are a tenant and your partner leaves you, you can take over the lease in your own name.
6. You’ll reduce your income tax…
By forming a civil partnership, you will create a single tax household, which will entitle you to an additional share of the family allowance, thus reducing your income tax liability.
7. …but may become liable to wealth tax (ISF)
The downside of receiving an additional income tax share is that you also become a single tax household for wealth tax purposes. Your 2 assets will be combined, and if you exceed 1.3 million euros, you will be liable for wealth tax.
This should be put into perspective, however, as even if you’re not in a civil partnership, the mere fact that you’re in a registered cohabitation means that you’ll be a single tax household for wealth tax purposes.
8. PACS does not make you your partner’s heir
If your partner dies, you will not be his or her heir. If you wish your partner to inherit your property, you will need to draw up a will.
9. If you have a will and you die, your partner will not pay inheritance tax.
Like the surviving spouse, the surviving partner of a PACS benefits from a total exemption from inheritance tax.
10. PACS does not allow you to obtain your partner’s nationality
A PACS does not give you the right to your partner’s nationality. However, if you expressly apply for French nationality, the fact that you are in a PACS with a French national will support your application.
Would you like to enter into a civil partnership and draw up a PACS agreement? Would you like advice on how to set up your PACS agreement? Contact an AGN-affiliated lawyer in your area, who can advise you and secure your relationship by drafting your PACS agreement!