What are Preliminary Financial Disclosures in California Divorces?
Preliminary financial disclosures are mandatory requirement to complete for getting a California divorce. Preparation and exchange of financial disclosures is one of the initial steps in any divorce in California. If the parties fail to fulfill this step then the judge will not grant the divorce. Parties that withhold financial information willfully or are negligent while stating them might face devastating results. Complete transparency and disclosure during the preparation of the preliminary financial disclosures cannot be understated.
The reason why preliminary financial disclosure is so important
California happens to be a community property state. This means, whatever is acquired during marriage becomes community property. The term community property includes pensions, assets and liabilities. So at any point of time, if a person wants a divorce, under California law the two parties are required to resolve all the issues that were created in the course of the marital period. Examples of such issues would be custody matters, division of assets and liabilities, among others.
Invested parties are required to fill the preliminary financial disclosures which include the Schedule of Assets and Liabilities (FL-142) and the Income and Expense Declaration (FL-150). Together these two documents sum up all the property and income of the two parties.
Only upon the complete disclosure will the court have a clear understanding of the entire community estate. Often people representing themselves do not understand what the term community property means. Hence they end up excluding certain information, unknowingly, which leads to incorrect information.
Intentional withholding of preliminary financial disclosure information
One of the most serious consequences of intentional withholding of preliminary financial disclosure is the innocent party losing their share of community property. And the other consequence would be a court punishment to the guilty party for not disclosing their assets, debts, or liabilities.
Although the forms FL-150 and FL-142 might look simple and easy to understand, they are often filled with multiple complexities. Due to the legal nature of the terms and complicated definition of community property, most people often get confused as to where they have a right to share and where they don’t. What belongs to who is also a matter of concern when it comes to family heirlooms or the spouse’s 401(k), among other assets. It is to deal with these intricacies, it makes sense to hire the services or seek consultation with a divorce advocate who can help you prepare for this important step in divorce filing and proceedings.
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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