In a California divorce, preliminary financial disclosure is a list of marital assets and debts from each spouse to the other before the divorce proceedings get started in a family law court. Spouses must provide an accurate list of all their assets and debts to make settlement negotiation easier and ensure a fair divorce case.
Preliminary financial disclosure is a mandatory filing requirement for any couples who are seeking a divorce in the state of California. Put simply, they are a required step in the divorce process.
Without them, a family law court judge will not grant the divorce. Spouses can face harsh consequences for willfully omitting marital assets or debts on their preliminary financial disclosures. If a spouse fails to exchange these disclosures, the judge could set aside the judgment.
Thus, preparing financial disclosures in a divorce will require attention to detail which is often a significant challenge. If you need assistance in preparing these forms, you should contact a California family law lawyer.
Waiving financial disclosures
Preliminary disclosures can't be waived unless the divorce petitioner waives the respondent's final disclosures in a true default case, which means they didn't appear or even file a response to the divorce petition.
However, in divorce cases where the respondent did file a response to the California divorce petition or the spouses signed a marital settlement agreement, they could waive the final financial disclosures by completing a “Stipulation and Waiver of Financial Disclosure” (Form FL-144). Our Los Angeles divorce and family law attorneys will examine this topic in more detail below.
What are the Mandatory California Divorce Financial Disclosure Forms?
As stated above, the divorce petitioner and the respondent must exchange preliminary financial disclosures before receiving a final divorce judgment. These disclosures help both spouses and the family law court identify everything within the community estate. The preliminary financial disclosures in a California divorce process include the following forms:
- Declaration of Disclosure – Form FL-140;
- Declaration Regarding Service – Form FL-141;
- Schedule of Assets and Debts – Form FL-142;
- Income and Expense Declaration – Form FL-150.
In the preliminary financial disclosures, each spouse will identify their assets and debts under penalty under state law. Further, after spouses sign the declaration, they acknowledge and confirm they have disclosed all known current assets and debts.
They are also required to acknowledge any financial opportunities to the marital community. The divorce petitioner must always serve their preliminary disclosures on the respondent unless the case proceeds as a true default.
How Should I Prepare a Financial Disclosure?
Recall from above that a judge won't grant a final divorce decree before spouses have exchanged preliminary financial disclosures. California family law courts must have these documents to calculate their community property awards fairly. Here are the basic steps:
- Once you file for a divorce, then complete the Declaration of Disclosure (Form FL-140) accurately and serve this document to your spouse. As listed above, other forms also must be completed.
- You must accurately list all assets and debts on these various forms under penalty of perjury. After you sign the declaration, it's considered a confirmation that you disclosed all your assets and debts.
- In a divorce, the spouse who is filing for a divorce (petitioner) must “serve” the preliminary disclosure documents to their spouse whom they are divorcing (respondent), assuming they are responding to the divorce petition.
If you willfully lie on misstate the information on the financial disclosure form, you are committing a crime and could face punishment by the court. For example, the spouse could be held in contempt of court, punishable by hefty fines. The judge might even grant the other spouse's request for sanctions and order the offending spouse to pay the other's attorney fees due to their misconduct.
Why Are the Financial Disclosures Important?
Most property acquired during a marriage will be considered community property, including all assets, debts, and even pensions. When one spouse decides to seek a divorce in California, several important issues must be resolved before a final divorce decree will be issued.
For example, dividing property, assets, debts, and the central issue of child support, spousal support (alimony), and child custody. Put simply, preliminary financial disclosures are a critical tool for the courts to resolve all these issues fairly.
They are important because they identify community property from the separate property and the income and debts of both spouses and help determine the community estate. When a spouse attempts to complete an initial financial disclosure without help from a family law attorney, they often make crucial mistakes because they don't know California's community property statutes.
What Happens If My Financial Disclosures Are Inaccurate?
If you make mistakes on your preliminary financial disclosures, you could face consequences of a financial nature. For instance, if you don't clearly understand what is considered community property, you will not usually receive what you are entitled to. For example, you might not know you are entitled to one-half of your spouse's deposits to their 401(k) or other retirement accounts during the marriage.
If a spouse fails to list their assets on the disclosure forms, the other spouse could lose their fair share of the community property. In many divorce cases in California, spouses simply don't fully understand separate and community property, and many don't include separate parcels on the disclosure forms.
While family law courts don't typically get involved in the division of separate property in divorce cases, many spouses do not understand all the legal standards of assets and property can be mistaken as separate, for example:
- a home purchased under one name during a marriage;
- retirement account created before marriage but funded during the marriage;
- savings account under one spouse's name but built up during the marriage.
If you need assistance with the preliminary financial disclosures required to get a California divorce, contact our experienced family law lawyers. Furman & Zavatsky are Los Angeles divorce attorneys based in Encino, CA. We serve people across Southern California. Our law firm offers a free case evaluation at (818) 528-3471.