Whether you have children or not, whether you have a large marital estate or a small marital estate, there are certain steps which must be accomplished in every dissolution case. One of the most important steps is the requirement of a complete financial disclosure.
Financial disclosure is not merely a procedural formality; it is a legal and ethical obligation enforced by California Family Code §2100. At its core, financial disclosure refers to the act of transparently sharing all financial data, assets, liabilities, and income sources with the other party during divorce proceedings.
In California, the parties to a marriage are said to be fiduciaries to one another, meaning they are each held to the highest standard and duty of care when dealing with one another regarding their finances. California requires complete and open disclosure of the entire “financial picture” from each party’s perspective.
This has been codified in Family Code, §2100, which states:
“(a) It is the policy of the State of California ….
(b) Sound public policy further favors the reduction of the adversarial nature of marital dissolution and the attendant costs by fostering full disclosure and cooperative discovery.
(c) In order to promote this public policy, a full and accurate disclosure of all assets and liabilities in which one or both parties have or may have an interest must be made in the early stages of a proceeding for dissolution of marriage or legal separation of the parties…”
In California, full disclosure means that both parties must present an accurate and detailed financial statement without omission or misrepresentation. The rationale is to ensure fair negotiation, equitable division of property, and appropriate determination of support obligations. Omitting or hiding information, intentionally or otherwise, can have serious legal and financial consequences.
This process is designed not only to protect the legal integrity of the divorce but to promote transparency, reduce conflict, and foster settlements without prolonged litigation.
Many times, a client will ask, “Do I have to tell them about X?” The answer, in light of the above authority, is a resounding “yes”. If you have something of value, you must declare it.
Under subsection (c), there is a continuing duty to update the disclosures. That means if an asset materially appreciates or depreciates, the other side has a right to know that as well.
The clearest way to explain this is to say: “Would you want to know if this was on the other side?” More often than not, the answer is “yes”, and the client can then see that this is, in essence, nothing more than the Golden Rule.
Disclosure isn’t limited to pay stubs and bank accounts. A proper financial disclosure includes:
Even when an asset is separate property, its disclosure is required. The purpose is full transparency so that each party, and the court, can evaluate the complete financial landscape.
The financial disclosure process involves two primary phases:
1. Preliminary Declaration of Disclosure (PDD)
Filed early in the divorce process, the PDD sets the groundwork for transparency. This must include:
2. Final Declaration of Disclosure (FDD)
Typically required later in the case, unless both parties mutually waive it. The FDD confirms any updates or changes from the initial disclosures.
Both stages require accuracy, thoroughness, and evidence.
Disclosure is not a one-time event. There is a legal obligation to update the disclosure if any material changes occur. This includes:
Failure to update disclosures in real time can compromise settlement agreements and expose a party to judicial sanctions.
A well-known example that underscores the importance of honest disclosure is the Marriage of Rossi. In this case, a woman won $1.5 million in the lottery shortly before filing for divorce and failed to disclose it. Upon discovery, the court awarded the entire winnings to her husband as a sanction for fraud.
This case illustrates that non-disclosure, even in what one might consider personal or separate assets, can result in the forfeiture of that asset altogether.
Financial disclosure directly influences decisions regarding:
If one party hides or undervalues assets, the entire financial balance of the judgment is skewed.
When one party refuses to disclose or submits incomplete information, the other party has several legal remedies:
Proactive legal representation is essential in these scenarios.
In high-net-worth or complex divorce cases, full disclosure may require assistance from:
At Reape-Rickett, we maintain relationships with California’s top financial experts to support your case with accuracy and precision.
Financial disclosure isn’t just about legal compliance; it sets the tone for negotiations. Transparency builds trust, while concealment fuels litigation. Many divorces are resolved more quickly and affordably when both parties feel the process is fair. Clients who understand the role of disclosure often avoid resentment, save legal fees, and find closure more easily.
California is a community property state. This means all assets and debts acquired during the marriage are presumed to be shared equally. Unlike equitable distribution states, where judges may divide property unevenly, California’s rigid 50/50 structure makes accurate disclosure crucial. What may seem minor in other states (e.g., small inherited savings) may have substantial consequences in a California divorce judgment.
Yes. Even if you believe they are separate property, they must be disclosed for full transparency. Their characterization can be legally debated, but omission violates disclosure obligations.
You are expected to make a diligent search. If discovered later, disclose immediately to avoid accusations of fraud.
While pay stubs are ideal, you can use other evidence, like direct deposit history or employment contracts. Your attorney can guide you based on your situation.
While not required by law, legal guidance ensures compliance and avoids errors that can delay proceedings or trigger penalties.
This is a red flag. A forensic accountant may be used to analyze bank records, lifestyle expenses, and business deductions for hidden income.
Whatever the size of your marital estate (or your separate property holdings, for that matter), it is most important to prepare your disclosures early on in the proceedings. Some forms are required to provide the basic information; however, corroborating documents must be attached (pay stubs, deeds to real property, car titles, bank statements, etc).
We at Reape-Rickett Law Firm have the expertise and resources available to assist you regardless of whether your estate is modest or extraordinarily high. We have also forged relationships with some of the best appraisers and forensic accountants in the State of California to better serve our clients.
Don’t take chances with something as critical as your financial future. Let Reape-Rickett guide you through the process of financial disclosure with the accuracy, discretion, and legal precision your case deserves.
Visit https://divorcedigest.com/ or contact Reape-Rickett Law Firm directly to speak with a divorce attorney who specializes in high-quality legal support for your California dissolution case.