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What Must You Disclose about Your Assets and Liabilities in Your California Divorce Proceeding?

What Must You Disclose about Your Assets and Liabilities in Your California Divorce Proceeding?
It is human nature to not want to disclose financial details with your soon-to-be-ex spouse. However, when you are involved in a legal proceeding for dissolution of marriage, legal separation, or nullity, it is mandatory that you do so. In fact, failing to make full and accurate disclosures can have severe consequences.

Under California law, spouses must act as “fiduciaries” to one another. This is an obligation of the highest order, requiring each spouse to deal with the other in “good faith” and not to take “unfair advantage” of the other. The fiduciary duty continues past the date of separation even while the divorce case is pending. The fiduciary duty also applies when it is time to make mandatory financial disclosures during the legal proceedings.

California law provides for the systematic disclosure of financial information between the spouses. Complete and accurate disclosure is important for several reasons:

  • It prevents the parties from dissipating assets before the court officially distributes them.
  • It helps to “ensure fair and sufficient child and spousal support awards.”
  • It helps the court divide the couple’s assets and liabilities.
  • It helps reduce acrimony between the parties.

The first disclosure is considered preliminary and consists of two main documents: the “Schedule of Debts and Assets” and the “income and expense declaration.” These documents are both basic inventories. The first document must list all actual or potential assets and liabilities, regardless of how they are titled or listed on paper. The second document must provide information about each party’s income and expenses. Both parties have an ongoing duty to update these documents immediately if there are any material changes.

The second disclosure is called final. The final disclosures provide much more detail about each party’s financial information. These documents must provide “all material facts and information” about assets, liabilities, community property, community obligations, and party income and expenses.

California laws include specific requirements that must be met in financial disclosures. If these requirements are not met, the court can impose monetary sanctions, including attorney’s fees and costs, and can hold the party in contempt of court. The attorneys at the Law Offices of Judy L. Burger have extensive experience in family law matters, including financial disclosures. Contact us today to learn how our attorneys can help you in your case: (415) 293-8314.

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