A divorce case in California comes with many complicated tasks and processes. One such task is the preliminary financial disclosure. This is a mandatory filing requirement for divorcing couples in the state of California. The preliminary financial disclosure is a list of all marital assets and debts from each party, disclosed to the other spouse before divorce proceedings. Each party must accurately disclose assets and debts for a fair divorce case. A lawyer can help a spouse with the preliminary financial disclosure process, ensuring he or she fulfills this step correctly to avoid penalties.
How to Prepare a Preliminary Financial Disclosure
A judge in California will not grant a divorce decree before both spouses have exchanged preliminary financial disclosures. The courts need these documents to correctly quantify the couple’s community property. Without this information, the courts cannot accurately calculate community property or divide it in half between the spouses. After filing for divorce, each spouse will fill out the Declaration of Disclosure completely and accurately. Then, each will serve the document to the other spouse.
Preliminary financial disclosure requires other forms as well. Each spouse must submit the Schedule of Assets and Debts, Income and Expense Declaration, and Declaration Regarding Service of Declaration of Disclosure. Each party must clearly list all assets and debts in these forms under penalty of perjury. Upon signing the declaration, each spouse confirms he or she has fully disclosed all assets and debts known to the party. In a divorce case, the petitioner (the spouse that filed for divorce) must always serve the respondent a preliminary disclosure. The respondent, however, only has to serve the paperwork if he or she responds to the petition.
It is against the law to deliberately lie or misrepresent information on the disclosure form. The courts may punish a spouse that intentionally or negligently fills out the preliminary financial disclosure form incorrectly. The courts can hold the person in contempt, which can come with penalties such as fines. A judge could also grant a spouse’s request for sanction, or money to cover legal fees and attorney’s costs that accrued because of the other spouse’s misconduct.
The Importance of Preliminary Financial Disclosure
California is a community property state when it comes to ruling on property division in divorce cases. The courts in California will classify all assets and debts acquired during the marriage as community property. Then, the courts will divide all community property in half between the spouse during a divorce case in which the couple cannot agree to different terms for property division.
The preliminary financial disclosure is important during a divorce case in California because it keeps things reasonably fair between both parties. Without full disclosure of one’s assets and debts, the other spouse cannot receive his or her fair share of community property. The spouse that failed to disclose his or her full assets would unfairly get to keep more than 50% of shared property in a divorce. Intentionally failing to disclose assets is a type of misconduct that could lead to legal penalties.
If one spouse discovers later that the other was not honest or accurate during the preliminary financial disclosure, that spouse can return to court and ask for a revision of asset division. The courts can reassess property division based on the new information, most likely leading to more money or assets for the spouse that did not conceal the information. The spouse that failed to properly fill out the forms could also face punishments for misconduct. The courts, for example, may decide to give 100% of the concealed asset to the other spouse rather than splitting it 50/50. Working with a lawyer can make sure a spouse correctly fills out all preliminary financial disclosure forms.