Preliminary Financial Disclosures Are Necessary In A Divorce
Preliminary financial disclosures have a crucial part in a divorce. Documents detailing the debts and assets of the parties (separately and jointly held) in a divorce need to be prepared. Omission of any debts or assets, intentionally or unintentionally, can affect the outcome of the divorce. California divorce laws require both parties in a divorce to prepare preliminary financial disclosures or else a divorce will not be granted.
The Schedule of Assets and Debts (FL-142) and Income & Expense Declaration (FL-150) make up the preliminary financial disclosures that have to be submitted by divorcing couples in California. All separate assets and debts, property and income from community property are declared in these two documents. The state of California considers all debts, assets, liabilities, pensions and property acquired during the period of marriage as ‘community property’.
Importance of disclosures
The disclosures help the court and the divorcing couples to determine the extent of their community property. For most people, determining community property becomes a tedious task. The state of California allows you to represent yourself in your divorce case. So if you are not aware of what qualifies as community property you stand to lose the case. Similarly, intentionally incorrect disclosures can severely affect a divorce ruling. Either or both parties may get affected.
Result of incorrect disclosures
If a party innocently makes mistakes while filling out their disclosures because they are not aware of what constitutes community property, they stand to lose out on their share of the community property. For example, the husband receives returns on an investment made in his name and the wife inherits a piece of jewelry from her grandmother.
Any person would think that because the investment is in the name of the husband, it is his separate property; and the inherited jewelry is community property because it is not in the wife’s name. But legally speaking, that is incorrect. The inherited jewelry is in fact the wife’s separate property and the returns on investment are a community property. So the woman would have lost out on 50% of the returns on investment.
Intentionally preparing inaccurate disclosures can lead to punishment for the guilty party. If one party makes certain deposits and enjoys benefits from it but the other party is clueless about this income, the situation will be termed as willful withholding of information. The party concealing this information can be punished by the court.
Getting divorced in California can be complicated. Download our free eBook, 18 Important Things to Know About California Divorce to educate yourself on the process.
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