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"I Declare" - A Must in Divorce
Honesty doesn't always pay, but dishonesty always costs.
- Michael Josephson
There are four areas to address in most divorces:
Three of these directly involve money – the fourth does so indirectly.
In light of the financial decisions needing to be made, California requires that the couple make full disclosure to each other on all sources of income, expenses, properties and liabilities (California Family Code 2100 et seq). To implement these requirements the law provides that a “full and accurate disclosure” of all assets and liabilities (whether community or separate), be served on the other party within sixty days of filing the Petition (or Response). In addition, each party must provide an Income and Expense Declaration within the same timeframe. The parties also must update each other if there is any material change in the information provided.
The purposes of these disclosures are:
There is a common fear by one or both spouses that the other will be hiding information. That is why attorneys vigorously pursue discovery (one of the most expensive parts in divorce). In non-litigated divorces (i.e., mediation) the parties often voluntarily provide this information without investigation. They do it on trust. But, are there safeguards against being less than truthful?
Disclosures are provided under penalty of perjury. Failure to provide accurate and complete information could result in criminal penalties. Perhaps a bigger safeguard is that a settlement or judgment can be overturned if significant failures to disclose are later discovered. One of the most famous examples occurred when a wife won the lottery, didn’t tell her husband, and filed for divorce. The husband learned of the lottery winnings after the divorce. In that case, the judge overturned the divorce agreement and awarded 100% of the lottery winnings to husband.
Remember: to be fair, you must be aware.
Generally, debts incurred during the marriage are community obligations. This includes credit card bills, even if the credit card is in one name only. Student loans are an important exception because they are considered separate property debts. Community property possessions and community property debts are divided equally unless both spouses agree to an unequal division in writing. If spouses can't agree on the division of debts and possessions, a judge makes that decision.
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