By Ariel Sosna, JD
In a California divorce, there are four basic steps if both spouses are taking part in the action.
Step 1: filing and serving the Petition and Summons
Step 2: filing and serving the Response (this is the only optional step)
Step 3: completing the disclosures
Step 4: completing the judgment package and an agreement which addresses everything at issue in the divorce.
Step 3 is often the most time-consuming step because it requires spouses to list and document EVERYTHING they currently own and owe. The disclosure requirements are detailed under Family Code section 2100 et seq and they require that spouses produce documentation of all assets, debts, and income. The requirement is that spouses produce documentation regarding all assets and debts. This means that spouses have to produce information and documentation regarding both separate property assets (such as assets owned prior to marriage, inheritance, or gifts to just one spouse) and community property assets (anything owned because of income earned during the marriage) as well as separate and community debts.
The failure to produce this information can be costly. The Family Code authorizes large financial penalties (called sanctions) for not producing information regarding income, assets, and debts. The stakes are huge and it is important to disclose all information. Sometimes additional information may be required, such as how money was spent during the marriage, if it clarifies ownership of an asset or other question.
Keep in mind that disclosure does not mean that the asset will be divided. It is simply a process to ensure that everyone has all the information available as they navigate the divorce process.
In a Collaborative Divorce, care is taken to build trust regarding the disclosure of this financial information. By having a team working together to marshal all the asset, debt and income information, spouses can feel confident that everything has been disclosed, even the separate property.
So the short answer is yes, you have to disclose everything, but you don’t have to disclose every financial transaction during the marriage.