Financial Disclosures in Divorce – Corona, Riverside
When the accumulation of finances during a marriage can be so immense, a full disclosure of finances during a divorce clearly makes sense. This is particularly critical for parties who either had very minimal to no management or control of the assets and debts. Aware of this possibility, it is mandated for parties to disclose fully to each other all of the finances that may have been accumulated during the marriage. As this is a substantial step in the process of divorce and can be a main point of contention between the parties, having an attorney with extensive experience in handling these matters may be necessary. Our attorneys handle these matters on a daily basis, can assist you with your financial disclosures, and can deal with situations where the other party’s financial disclosures may be incomplete or inaccurate.
Preliminary and Final Declarations of Disclosure
In divorce cases in California, there are two types of financial disclosures, a preliminary declaration of disclosure and a final declaration of disclosure. Although effectively achieving the same goal which is to ensure full disclosure of the parties’ assets that may have been accumulated during the marriage, the difference is the timeline as to when these disclosures must be provided to the other party and whether they are required.
Preliminary Declaration of Disclosure
As will be discussed in detail below, service of preliminary declarations of disclosure are always required by the courts. To ensure the parties’ compliance, the courts require the filing of only one form known as the “Declaration Regarding Service of Declaration of Disclosure and Income and Expense Declaration” (FL-141) by both parties. The remaining forms and supporting financial documents that are included in the preliminary disclosure are served only upon the other party and not with the court.
Final Declaration of Disclosure
The Final Declarations of Disclosure, on the other hand, are typically completed and served upon the other party near the end of a divorce. With cases that last for a long period of time such as more than one year, it is expected that assets, debts, and other finances would change significantly over the course of the divorce. As a result, it may be necessary to complete a final declaration of disclosure with a more recent recap as to the status of the assets, debts, and other finances that were previously disclosed.
While the preliminary declaration of disclosure is required to be exchanged, the final declaration of disclosure is not required in every case. The parties can waive their right to receiving a copy of the final declaration of disclosure. This can be achieved by filing a form known as a Stipulation and Waiver of Final Declaration of Disclosure (FL-144) and having a clause within the final Marital Settlement Agreement stating that the parties have agreed to waive the final exchange. A common reason why people waive the final declarations of disclosure is when a divorce case does not contain a significant number of assets and debts that would warrant an exchange.
What forms comprise the Declarations of Disclosure?
- The Preliminary Declaration of Disclosure checklist (FL-140)
This ensures that parties are aware of the forms and documents that need to be included in the packet itself to be served upon the other party. Not only do the forms below need to be included but also the previous two (2) years of tax returns must be included and a signed, written statement under oath that a party did not engage in any business opportunities during the marriage and any other obligations during the marriage that were not previously disclosed in the other sets of forms above.
- The Schedule of Assets and Debts (FL-142)
As the title of the forms suggests, the parties’ information and supporting documentation regarding separate and community assets and debts would be included. The form consists of four pages which clearly organize all potential assets and debts categorically such as household furniture, furnishings, and appliances; jewelry, antiques, art, and coin collections; vehicles, boats and trailers; and so forth. One of the key aspects of the Schedule of Assets and Debts is the necessity of providing supporting documents to supplement the information disclosed in the form itself. The supporting documents assure the other party that the valuation of the assets contained in the forms are accurate.
- The Income and Expense Declaration (FL-150)
The Income and Expense Declaration form comprises of financial information related to a party’s ongoing income and expenses on a monthly basis. This includes such information as a party’s gross income, any investment income, commissions, bonuses, and other types of income. This particular form is important because it has a potential impact on ongoing child and spousal support. Included with the Income and Expense Declaration must be a copy of the last 2 months of pay stubs of that particular party. This form is unique in that not only does it need to be included in the declarations of disclosure but also is required when any party is requesting an order from the court that involves financial issues such as child and spousal support.
To speak in more detail about financial disclosures, determining income for spousal or child support or other family law matters, contact our offices today.