All California divorces require what are called financial disclosures in which information clarifying everything of financial significance is put on the table. The need for divorce financial disclosure arises in part from California law that spouses have equal rights to manage and control their community (marital) property.
As regards this property, each spouse owes the highest duty of good faith and fair dealing to the other. This includes being open, honest and providing full access to whatever financial records exist. This duty continues after separation and lasts until all property and debts have been divided in the divorce.
Each spouse is required by law to give full and true disclosure regarding the existence, character and value of all assets and debts that are or may be community property. Each spouse must even disclose any income-producing opportunities that arise from any activities of either spouse during the marriage, even if they have not yet been acted upon.
Since a divorce also involves decision-making about child support (if there are minor children) and spousal support, the law also provides for each spouse to be accurately informed about each others’ income and expenses.
Divorce Financial Disclosure
Therefore, to get a divorce in California, both spouses are required to exchange with each other disclosure forms listing their property, debts, income and expenses.
If a judge has to make any decisions in your divorce regarding support or your property and debts, the court will require that these listings be filed. This is to enable the judge to make well-informed decisions. If you are able to come your own settlement agreement, perhaps with the assistance of a divorce mediator, you don’t need to file the listings of assets, debts, income and expenses. But, at a minimum, you need to file forms in which you affirm that you have exchanged these listings with each other.
Once you have exchanged complete information about your assets, debts, income and expenses, each spouse has a continuing duty to the other throughout the divorce to update this information with any and all changes. This enables each spouse to continue to have accurate and current information to rely upon in their decision making.
Beware that any property or important information about property that is mistakenly overlooked, misrepresented or concealed can result in your divorce judgment being set aside, even years after the divorce. Penalties can also be imposed. One woman had her entire $1.3 million lottery winnings awarded to her former spouse because she intentionally failed to disclose it. Another divorce judgment was set aside because a divorce financial disclosure form stated “unknown” for the value of one’s spouse’s pension.