What Are The Declarations of Disclosure in a Divorce Case?
If you are going through a divorce or legal separation, you should be familiar with California’s disclosure requirements. These financial disclosure requirements are very strict, and compliance with them is of the utmost importance. California requires both a Preliminary Declaration of Disclosure, and a Final Declaration of Disclosure.
Parties in every divorce or legal separation case are required to serve (not file) a Preliminary Declaration of Disclosure (“PDD”). The PDD identifies all assets the declarant has or may have an interest in, along with all of their liabilities. (Cal. Fam. Code § 2105(b)). PDD’s must be completed on forms approved by the Judicial Counsel of California, and are signed under penalty of perjury.
Along with their PDD, the declarant must serve copies of their two most recent tax returns. PDDs are served 60 days after the Petition for Dissolution is filed if you are the Petitioner, or 60 days after the Response Petition is filed if you are the Respondent.
Final Declarations of Disclosure
Final Declarations of Disclosure (“FDD”) are more complex than PDDs. FDDs must include all “material facts and information” regarding:
(1) the characterization of all assets and liabilities,
(2) the valuation of all assets that are community property or in which the community may have an interest,
(3) the amounts of obligations that are community obligations or in which the community may have liability, and
(4) the earnings, accumulations and expenses of each party that are not included in the income and expense declaration.
(Cal. Fam. Code § 2105(b)). FDDs must also contain an “accurate and complete written disclosure” of any investment opportunity that presented itself after the date of separation but which results from an investment made during the marriage.
Like PDDs, FDDs must be completed on Judicial Counsel approved forms, and are executed under penalty of perjury.
Unlike PDDs, FDDs can be waived. If they are not waived, FDDs must be served prior to trial.
Income and Expense Declarations
Along with the Preliminary and Final Declarations of Disclosure, parties must file income and expense declarations. These declarations are also filed whenever a party is asking the Court for a financial order such as spousal support, child support, or attorney’s fees.
Income and expense declarations require the declarant to identify their current income and expenses. Backup documentation must also be provided, including but not limited to pay stubs for the declarants last two months of pay.
Penalties for Noncompliance with Disclosure Requirements
California law emphasizes the importance of full and accurate financial disclosure in divorce cases. To that effect there can be very significant penalties assessed against parties who do not comply with California’s disclosure requirements. For example, if disclosure requirements are not complied with, it can be a basis for setting aside a judgement (Fam. Code § 2122(f)), and can also result in sanctions being imposed against the non-compliant party. (See Fam. Code § 2107).
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