Dr. Judith Gerhart, CFP
Certified Divorce Financial Analyst 
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Disclosures of Finances
August 22, 2008
Frequently in relationships, one person knows more about their finances than the other. California is a community property state. This means, all property acquired after the date of marriage, before the date of separation, except for gift and inheritance, is community property. Community property assumes the notion that even in relationships where only one spouse works, the other spouse is contributing to the marriage by staying at home and providing domestic duties.
Sometimes, the spouse that doesn’t work stays at home and does nothing. In a community property state, that doesn’t matter. The law assumes they are contributing something. Thus, in a divorce, both parties are entitled to half of what was earned during the marriage.
Becuase of the community property laws, the law mandates that both parties must make extensive financial disclosures. Generally they will come in two parts- the Preliminary Declarations of Disclosure (served at the outset); and the Final Declarations of Disclosures (prior to settlement or trial). Because one party may know more than the other, these mandatory disclosures are the court’s way if preventing foul play. You must exchange disclosures. You cannot waive them.
If you are the supporting spouse, you may wonder: What happens if I don’t disclose my assets? He or she does not know of my offshore bank account in the Virgin Islands.
There are several consequences to not disclosing. The Judge may overturn your agreement. The Judge may punish you by awarding the non-disclosed asset ti the other side. In a famous 1996 case against non-disclosure, Marriage of Rossi, Denise Rossi won $1.3 million in the California State Lottery. Eleven days later, she filed for divorce from her 25-year marriage, never telling her husband. Judgement was entered. Two years later, her ex-husband discovered that his ex-wife had won the lottery. (They always find out.) He filed a Motion and the judge gave the ENTIRE $1.3 million dollar winnings to the husband, since the wife had intentionally not disclosed her winnings in the divorce proceedings.
Always disclose.
Attorney Time: 10-50 hours ($3000 - $15,000)
Costs of subpoenas, documents: $500 - $1500
Deposition costs: $2000 - $5000
Court Costs: $40 per motion
Time Factors:Discovery is perhaps the most tedious process in a divorce case. If you have little or no assets, there should be very little to work on. However, the more assets ir debts you or your spouse have, the more time we will need to obtain documents necessary to determine the value for settlement, and the more time we will need t review the received documents. If your spouse is uncooperative, we may need to file court motions in order to obtain necessary documents. The time it takes to complete discovery depends mostly on the cooperation of the parties and the availability of the documents.
By Kelly Chang Rickert
Posted by Judith Gerhart on August 22, 2008 | Permalink | Post a comment
Topics: Divorce, Separation, Tips |
