Exchanging financial information with your spouse is one of the first things you must do after submitting your petition for divorce. Referred to as financial disclosure, this is a required step because it facilitates just settlements for critical issues, such as child support, spousal support, and property division.
As part of financial disclosure, you must complete a Income and Expense Declaration and a Property Declaration form. Additionally, you must include written disclosures of other financial data. It is important to be honest and accurate when completing the documents. Willfully concealing information is a breach of fiduciary duty that can expose the non-complying spouse to financial penalties.
Disclosure is a very tricky part of the divorce process. A skilled family law attorney can help you navigate it.
If you need legal assistance in Los Angeles, please call Claery & Hammond, LLP at (310) 817-6904 or submit an online contact form today.
Why Must You Share Financial Information with Your Spouse?
Financial disclosure is not an option in a divorce; it’s a requirement. Your dissolution cannot be finalized unless you and your spouse (with some exceptions) exchange material information about your income, assets, expenses, and debts.
As part of your divorce, you and your spouse (or the court) must decide on several critical factors. These include child support, spousal support, and property and debt division. California law requires that the resolutions be equitable and fair. The only way to ensure such happens is by knowing what each spouse has and owes.
When Must You Make Financial Disclosures?
The deadline for providing your spouse with your financial information depends on your situation. If you are the petitioner (the person who filed the request for a divorce), you have 60 days from the date you submitted the petition.
If you are the respondent (the person receiving copies of the divorce petition), you have 60 days from the date you submitted the response. However, you do not have to send your financial information to your spouse if you are not responding after receiving the divorce papers. Your spouse (the petitioner) must still share their financial information with you.
Depending on your situation, you may also have to make a final declaration of disclosure later in your case.
What Information Must You Disclose?
When exchanging financial details with your spouse, you must share everything regarding your assets, debts, property, and income. For the most part, you include the information on the Income and Expense Declaration and the Property Declarations forms.
On the Income and Expense Declaration, you must indicate your:
- Employment information
- Age and education
- Tax information
- Income (including overtime, commissions, spousal support, and other sources of income)
- Investment income
- Self-employment income
- Assets (including deposit account balances, stocks, and bonds)
- Average monthly expenses
- Attorney’s fees
- Number of children
- Child’s health care expenses
- Childcare expenses
When disclosing property, you must include one Property Declaration form for community property and one for separate property. Community property is anything acquired while you were married. Separate property is anything you owned or owed before your marriage.
Property includes:
- Real estate
- Furniture and appliances
- Jewelry and collectibles
- Vehicles
- Savings and checking accounts
- Cash
- Stocks and bonds
- Life insurance policies
- Retirement accounts
- Profit-sharing and IRAs
- Business partnerships
You must mail your financial disclosure forms directly to your spouse and copies of tax returns for the past two years. The only thing you must send to the court is the “Declaration Regarding Service of Declaration of Disclosure,” which verifies that you have met your legal obligation to exchange financial information with your spouse.
Your and your spouse’s financial disclosures must be honest and accurate. If you hide assets, misrepresent your income, or falsify any other information, you or your spouse could initiate a claim for breach of fiduciary duty. A finding that you willfully concealed financial data can result in the court awarding the injured spouse 50% of the hidden assets, attorney’s fees, and court costs.
Misrepresenting your assets can also trigger criminal prosecution. If you’re found guilty, you could be sentenced to incarceration and ordered to pay fines.
Schedule a Consultation Today
All stages of a divorce can be challenging, but the financial disclosure step can be incredibly cumbersome. It requires gathering detailed information about everything you owe, own, and spend. Inaccuracies in details can cause troubles later in the proceedings. A lawyer can help you sort through your information and ensure that you accurately report and share your finances.
At Claery & Hammond, LLP, we deliver sound legal guidance for family law matters in Los Angeles. Speak with a member of our team by contacting us at (310) 817-6904.