Preliminary financial disclosure is a mandatory part of getting a divorce. It is important that, when disclosing your debts and assets, you are as honest and transparent as possible. If you or your spouse are found to have purposely omitted any pertinent information, the consequences will affect both parties.
When accounting for all your assets, remember that California is a community property state. This means that any property acquired during a marriage, including debt or assets, is considered community property, meaning you share it with your spouse. So, all community property must be divided or resolved during a divorce.
Before you can be granted a divorce, both parties must fill out preliminary financial disclosures. The reason for these forms is to help both the spouses and the court discern the entire community estate.
This is why it is important to know that California is a community property state; without knowledge of what community property is, preliminary financial disclosure statements can be filled out incorrectly, which can cause major complications for all parties involved.
First of all, if a party is unaware of what constitutes community property and what constitutes separate property, they are at risk for missing out on assets they are entitled to, or for getting sanctioned by the court.
Separate property is defined as any property acquired before marriage or after separation. So, if a party inherits a large sum of money before marriage, that party does not have to disclose it as community property.
If a party inherits a sum of money during marriage, but keeps it a secret from their spouse until after the divorce is finalized, the cheated spouse is allowed to not only ask the courts to divide that asset, but also to punish the spouse who kept the money a secret.
Preliminary financial disclosures would protect the spouse who was unaware of the inherited money. It does not matter if an asset is in your name or your spouse’s name; if the asset or debt was acquired during the marriage, both of you are required by California law to disclose it as community property so that it can be divided or resolved.
The documents that make up a preliminary financial disclosure include:
- Schedule of Assets and Debts (FL 142)
- Income and Expense Declaration (FL 150)
- Declaration of Disclosure (FL 140) and
- Declaration Regarding Service of Disclosure (FL 141)
When filing preliminary financial disclosures, you may have to gather deeds, pay stubs, bank statements, or other documents that correlate with the listed assets. Again, it is important to be as transparent as possible about all properties, for your own good as well as your spouse’s.
Remember that properties disclosed in preliminary financial disclosures are simply being listed; you are not yet determining how they will be divided. Often, people make mistakes during this process because they are not sure what constitutes community or separate property, and it causes complications for both parties.
Even if you think you know what to disclose, it is always a good idea to consult with an attorney who is well versed on family law.
