Financial disclosure is a critical component of the divorce process. Both spouses are required to provide complete and accurate information about their financial situation to ensure a fair division of assets, debts, and support arrangements. Understanding the requirements and importance of financial disclosure can help you navigate your divorce smoothly and avoid potential legal consequences.
My homework packet for new divorce clients contains blank disclosure foms and instructions on what is needed for us
(always us) to move forward.
Financial disclosure ensures transparency between divorcing spouses, allowing the court to make fair decisions regarding:
- Property Division:
Accurate disclosure ensures a fair distribution.
- Spousal Support: Determining spousal support requires a clear understanding of each party's income, expenses, and financial needs.
- Child Support: Accurate financial information is essential to calculate child support obligations based on California guidelines.
1. Preliminary Declaration of Disclosure
(PDD)
Early in the divorce process, both spouses must
complete and exchange a Preliminary Declaration of Disclosure. THIS IS MANDATORY AND CANNOT BE WAIVED BY THE PARTIES
This includes:
Income and Expense Declaration
(Form FL-150): A detailed report of income, expenses, and financial needs.Schedule of Assets and Debts
(Form FL-142): A comprehensive list of all assets and liabilities, including community and separate property.Declaration of Disclosure
(Form FL-140): A formal statement affirming that all required financial documents have been shared.
2. Final Declaration of Disclosure
(FDD)
Before the divorce is finalized, both parties must exchange a Final Declaration of Disclosure. Unlike the PDD, the FDD may be mutually waived by the parties. The FDD updates any changes in financial circumstances and confirms the accuracy of earlier disclosures. FDDs should be waived with caution where the parties have complicated assets and financial issues.
3. Supporting Documentation
Financial disclosure forms must be accompanied by supporting documents such as pay stubs, tax returns, bank statements, and investment account summaries. These documents verify the accuracy of the information provided.
Hidden Assets
A spouse may attempt to hide assets or income to avoid sharing them. Identifying and reporting hidden assets may require assistance from a forensic accountant or legal professional.
Undervaluation of Assets
Misrepresenting the value of property, businesses, or investments can lead to unfair settlements. Proper appraisals and expert evaluations are crucial.
Incomplete Disclosure
Failing to disclose all assets, debts, or financial obligations can lead to legal penalties and the reopening
the matter to address the missing assets or information.
Under California law, spouses are legally obligated to provide full and accurate financial disclosures. Failing to do so can result in severe consequences, including:
- Sanctions: The court may impose monetary fines or penalties for incomplete or inaccurate disclosures.
- Award Adjustments: If hidden assets are discovered after the divorce is finalized, the court may award a greater share of the property to the other spouse.
- Criminal Charges: Intentional concealment of assets or fraud can lead to criminal prosecution.
Be Honest and Thorough
Disclose all income, assets, debts, and financial obligations, even if you believe they are insignificant or unrelated to the divorce.
Organize Your Records
Gather and organize all financial documents, including tax returns, bank statements, pay stubs, and property appraisals, before completing your forms.
Consult a Professional
Working with an
seasoned
family law
counsel or, at a minimum financial
professional who specializes in divorce scenarios can help you navigate the disclosure process and ensure compliance with California law.
Double-Check Your Forms
Review all forms and documentation for accuracy and completeness before submitting them to the court.
Financial disclosure is a vital step in ensuring fairness and transparency during a divorce. Accurate and complete disclosure helps protect your rights and facilitates equitable resolutions for property division, spousal support, and child support. For personalized guidance on financial disclosure and family law matters, contact me for expert assistance.
Call: 949-756-0684
Email: dgold@tldlaw.com
Disclaimer
This information outlines a few of the concepts that surround financial disclosure in the State of California. It is not intended to be, nor should it be construed as legal advice for any particular situation. Please seek advice from TLD Law or your personal attorney in your state or jurisdiction.
