What are Preliminary Declarations of Disclosure and Why Do they Matter?

by | Jan 12, 2023 | Divorce, Prenuptial/Postnuptial Agreements, Property Division, Spousal Support

In California, financial disclosures are an integral part of a any dissolution proceeding (“Divorce”), Pre-Marital Agreement (“Prenup”) and Post-Martial Agreement (“Postnup”) to name just a few specific instances where they are applicable – although this is not a complete list of where this may apply. These are often referred to as “Preliminary Declarations of Disclosure” or “Declarations of Disclosure” and they’re an integral part of many family law related matters.

This is because California is a “Community Property” state which means that when it comes to a marriage, all property acquired during marriage such as assets, liabilities, pensions, etc.., is deemed to be part of the community and must be separated on dissolution/divorce. These disclosures are important because it allows the Court and the Parties involved to ascertain what the entire community estate is and then how to choose to divide that estate upon separation. Furthermore, certain family law matters cannot be completed without these disclosures occurring.

In the event of a prenup for example, it also allows the Parties involved to ascertain the various assets and liabilities, etc., that the Parties may be contracting to limit or cede rights to that they may otherwise receive through community property distribution. As a result, for that portion or the entire agreement to be valid, the Parties must have made the applicable disclosures to the extent necessary or that agreement or portion thereof could be susceptible to being invalidated later due to lack of disclosure.

California specifically requires each party to fill out preliminary financial disclosure forms FL-150, Income & Expense Declaration(s), and FL-142, Schedule of Assets and Debts which identifies all separate property and community property. Further additional forms and documentation may be required as well. All of these disclosures are submitted under the “penalty of perjury” which means roughly that in the event a party knowingly provides false information or unintentionally submits incomplete information they may be subject to penalization by the Court, and it may also have significant negative impacts on the remainder of their proceeding.

The completion of these disclosures is generally a requirement for any Divorce proceeding, Postnuptial Agreement, and/or Prenuptial Agreement and is an unavoidable aspect of Family Law related litigation in many instances. As part of the completion of these disclosures, each Party is required to disclose what property they believe to be separate, what property they believe to be community, what the value of each asset claimed and the amount of any debt. If a mistake is made it can generally be corrected so long as this occurs within a “reasonable time”. To determine what is a “reasonable time” you will want to consult with a California licensed attorney.

While the forms themselves are not tremendously complicated, the actual content and extent to which information needs to be provided therein can quickly become extremely complex. There are also the previously mentioned negative impacts of a failure to make full disclosures whereby the Court may punish a Party found to be guilty of failing to disclose all assets and/or debts. Alternatively, a prenuptial or postnuptial agreement could have specific portions, or the entire agreement invalidated due to a failure to adequately disclose.

The process of sorting out what information and documentation is required for these disclosures can be arduous and would best be handled with the assistance of a knowledgeable and licensed California attorney as to avoid any pitfalls that could arise. Another significant reason having a knowledgeable and licensed California attorney in this area is to vet the other party’s disclosures to make sure that they are complete and proper as well. This can be difficult assuming everyone involved is trying their best to be “on board” let alone where a party is purposefully either refusing to disclose fully or is obfuscating their disclosures.

If you’re contemplating a divorce, a prenuptial agreement and/or a postnuptial agreement, an immediate consideration should be what will be necessary for me to complete my required financial disclosures as part of these processes.  Due to the difficulty and various other pitfalls that can be involved, we highly recommend that you seek a licensed and knowledgeable California attorney to advise you and assist with these disclosures should you need them.