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Divorce And Financial Disclosures
Divorce and Financial Disclosures

by Zonder Family Law Group

In a California divorce, the legal process commences with one party filing a Petition, and then serving the Petition and Summons on the other party, who then has the option of filing and serving a Response.

The next phase of the divorce process involves the parties serving on one another a Preliminary Declaration of Disclosure, which includes two sets of forms and supporting documents. One of these is the Schedule of Debts and Assets, which, as the name suggests, involves listing out all the debts and assets for that person, and the other is the Income and Expense Declaration, which, also as the name suggests, includes the income and expenses for the person filling it out (note: California does have alternative forms for both of these, but the principle is the same).

The parties’ respective Preliminary Declaration of Disclosure forms and supporting documents (or PDD for short) serve as the basis for addressing the financial aspects of a divorce, including property division, spousal support, and child support. Because of their importance in determining important financial issues, there can be a temptation to play fast and loose with these disclosures. This can take the form of leaving assets off of them, undervaluing or overvaluing assets, hiding and undervaluing income, and so on.

This may seem beneficial to you in the moment, and some unethical lawyers may even encourage or direct this but doing so can be a recipe for disaster in your divorce that only ends up hurting yourself.

You May Send Your Spouse into the Arms of an Aggressive Divorce Lawyer

Most people want to prevent their divorce from spinning out of control in terms of legal fees, long delays, and ongoing hostility. As we have discussed here elsewhere, that goal is best served when the parties work together amicably to finish the process. This requires trust, and trust is served by transparency. If there is no transparency, it is hard to imagine that much trust and thus the ability to amicably and quickly resolve the divorce will follow.

If you serve a PDD on your spouse full of errors and omissions – whether glaringly obvious or at the very least suspicious – don’t be surprised if your spouse’s first reaction is to immediately go out and find the most aggressive lawyer available to deal with your failure to properly disclose. As a result, your own attorney may need to be dealing with constant legal actions in response to your improper disclosure, as discussed briefly below.

You Risk Creating More Divorce Fees and Sanctions for Yourself

A faulty financial disclosure can easily turn an otherwise smooth divorce process into a distrustful and combative affair. This not only creates emotional headaches, but it can quickly turn into a legal quagmire, and one that you may solely end up paying for.

At the very least, you may need to redo your PDD and then attempt to go forward in a negotiation where the other party does not trust you. But there are numerous other negative consequences that may befall you.

An opposing attorney can issue discovery to get the real financial facts. This can include requests to you for your documents, requests for admission and interrogatories, depositions, and subpoenas to your employer, financial institutions, and others for your documents. The other party may even request orders from the court compelling you to provide requested information.

These are the types of legal actions that can send a person’s legal bills into the stratosphere, potentially far beyond the amounts a person was hoping to keep for themselves by playing with the numbers. And in California, a court will often force one party to pay for the other party’s attorneys’ fees when either a party has improperly withheld financial information or simply where one party has more financial assets available to pay for attorneys fees.

The Divorce Agreement May Be Unenforceable

Even if it may appear as though a person has “gotten away” with falsifying their finances in a divorce, what may appear to be a final divorce judgment can in some cases be later set aside if it is determined that the judgment was the result of fraud and/or the failure of one party to comply with the California financial disclosure requirements. Thus, not only will the divorce not be final, but the party who failed to make proper disclosures can face serious legal consequences as the divorce proceeding resumes.

Certainly, not all mistakes on financial disclosures are the result of bad intentions or fraud, but the legal consequences to the offending party can be significant in either case, and it is therefore helpful to work with skilled family law counsel in the disclosure phase and all other phases of the divorce process to reach a positive outcome.

Guidance on Your California Family Law Questions from a Westlake Village Divorce Attorney

If you would like to learn more about how our office can provide guidance on any California family law issues you are facing in Ventura County or Los Angeles County, contact the Zonder Family Law Group office today at (805) 777-7740 or (818) 877-0001, or schedule your strategy session using easy-to-use online form here.

 

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