Understanding California's Disclosure Requirements in Divorce
During a divorce, California law mandates comprehensive disclosure of all assets and liabilities by both parties. This requirement is rooted in the state's policy to ensure fair and equitable distribution of marital property. In California, which is a community property state, assets and liabilities acquired during the marriage are generally considered jointly owned, with some exceptions for gifts or inheritances.
The process begins with each party completing and exchanging Preliminary Declarations of Disclosure (PDD). This includes a Schedule of Assets and Debts (FL-142) and an Income and Expense Declaration (FL-150). The PDD is a critical step, as it lays the groundwork for negotiations, mediation, or court proceedings.
Following the preliminary disclosures, Final Declarations of Disclosure may be waived by mutual agreement if both parties are fully informed of the financial situation. However, the court can set aside a settlement if it later emerges that there was a failure to disclose significant assets or liabilities.
For example, in In re Marriage of Rossi (2001), the wife won the lottery but filed for divorce without disclosing her winnings. When the husband later discovered this, he took legal action, and the court awarded him all of the undisclosed lottery winnings.
Failure to comply with disclosure requirements can lead to severe consequences including monetary sanctions, and even perjury charges if false information is provided under oath. The law is clear that both inadvertent omissions and intentional concealment will not be taken lightly by the courts.
It's essential for divorcing couples to understand their obligations under California law regarding asset and liability disclosure. Consulting with a knowledgeable family law attorney can help ensure compliance with these complex legal requirements and protect one's interests during divorce proceedings.