The court requires that all divorcing parties complete a Declaration of Disclosure, FL-14O. These are a set of forms used to disclose all your financial information–even separate property. These forms must be exchanged with your spouse and are signed under penalty of perjury, so completing them truthfully and fully is very important; and if you don’t, or fail to provide these forms to your spouse, you can’t get divorced. Violating these rules can result in severe penalties.
You also want to do a good job on your Disclosures. Not only to facilitate the negotiations with your spouse, but if the Disclosures are incomplete, your spouse might interpret this as an intentional omission. This could hurt your negotiations and result in a costly litigation battle. If they are not done correctly, you can also be sanctioned by the court. Since these forms are signed under penalty of perjury, if you fail to disclose information that results in financial harm to your spouse, the judge can set aside or overturn your final agreement. A huge risk that’s just not worth taking.
The Declaration of Disclosure consists of the Schedule of Assets and Debts or the Property Declaration; and, the Income and Expense Declaration. In the Schedule of Assets and Debts or the Property Declaration, you list what you own and what you owe; and in the Income and Expense Declaration, I&E, you disclose what you earn and what you spend. All property and debts in which you have an interest must be listed. You must include the fair market value of the property, the amount of debt, and whether the property is community or separate.
You have a choice between using the Schedule of Assets and Debts, FL-142, or the Property Declaration, FL-160, to disclosure your assets and debts. The forms ask for the same information but are formatted a bit differently. The Property Declaration provides you a column to include how you propose the asset be divided, which the Schedule of Assets and Debts does not. You might have also completed the Property Declaration with your Petition or
Response Packet and will need to complete it if pursuing a Default divorce.
However, you must complete one for the community property and another one for separate property, if you have separate property; but you can disclose both community and separate on one Schedule of Assets and Debts. The Schedule of Assets and Debts all has more space to disclose your information. For the most part, family law professionals use the Schedule of Assets and Debts, FL-142, unless the case is going by default.
However you meet your Disclosure requirement, the courts are so serious about divorcing couples making a full and complete disclosure of all financial information that, unless an exception applies, the Declarations must be completed twice, once as a Preliminary set and then completed again as a Final.
Although this may seem repetitive, the Preliminary and Final are different in three ways. First, each spouse must serve a completed Preliminary on their spouse within 60 days of filing their respective Petition or Response Packet. The Final is provided at the end. There’s no time frame for the Final, other than it being completed when all the financial information is known.
The second difference is the amount of information provided. For both, you must disclose all asset and debt information, but because the Preliminary is done within 60 days of filing your Petition or Response, you may not yet know the character or value of some of the property, so you are not required to include that information in the Preliminary. However, by the time you complete the Final, you should have all the required information, including the property values and characterization of the property, whether community or separate.
The third difference is that you must provide a copy of the last two years of filed tax returns to your spouse with the Preliminary. This doesn’t have to be done again with the Final. Whether it is the Preliminary or the Final, you must include supporting documents with the Schedule of Assets and Debts or Property Statements, such as bank and credit card statements, car titles, and deeds for any real property. This is a lot of personal information so the Schedule of Assets and Debts isn’t filed with the court and the Property Statement does not need to be filed, either. However, you may have filed the Property Statement with your Petition and Response Packets or will file one for a Default Divorce.
Depending on your county, you may not have to file the I&E either. However, if you have any court hearings on monetary issues, like a child or spousal support, then the I&E must be filed and be up to date, no older than 3 months from the date you signed.
Since you do not have to file these with the court, the court requires you to complete and file the “Declaration Regarding Service of Declaration of Disclosure and Income and Expense Declaration,” FL-141. This states that you fully complied with the Declaration requirements and provided them to your spouse. On the form, you will provide the dates you served your spouse the Preliminary, or dates served the Final, and the way you served your spouse, such as personal service or mail. Remember to keep track of your dates and method.
Second, if you are pursuing a summary dissolution or default divorce, you only need to do a Preliminary because your case either deals with minimal property or your spouse is not participating in the divorce. In rare situations, a judge may also excuse someone from doing the final.
There are three steps to completing your Declaration of Disclosures. The steps are the same for both the Preliminary or the Final.
The first step is to complete the forms. The second step is to attach the supporting documents, and the final step is to serve them on your spouse. You will also want to make a duplicate copy for yourself to keep for your records to prove you met the disclosure requirement.
The Preliminary and Final have the same set of forms: Schedule of Assets and Debts, FL-142 or Property Declaration, FL-160 (one for community and one for separate); the I&E, FL-150, and a cover sheet, Declaration of Disclosure, FL-140. But you do them twice for the reasons I discussed. These forms are on the California court website and provided in this course with detailed instructions on how to complete them.
As a general instruction, on the Schedule of Assets and Debts and Property Declaration, there is a list of asset and debt categories. Fill out all the requested information. Include every property you are named on even if you do not own any interest in that property, or it’s your children’s accounts. You can add a note explaining that the property belongs to the kids, like a checking or college account. If you do not have that particular asset or debt, write in None for that category.
If you are working on the Preliminary and do not know if you have a particular kind of property, you can write in TBD or Don’t Know. You can also work on the Schedule of Assets and Debts or Property Statement with your spouse, completing one, and then each signing a copy. On the
Property Declaration, you can also provide a proposed division of the property.
On the I&E, each of you will need to do your own because the information is specific to you, like where you work and what you receive in salary. If you do not have one of the incomes or expenses listed, write zero in the blank. You must also attach your last two months of pay stubs and proof of any other income. In very limited situations, you may be able to use the Simplified Financial Statement, FL-155, instead of the I&E. Read the instructions on page two of the FL-155 to see if you qualify.
The simple cover sheet, Declaration of Disclosure, FL-140, is not filed with the court. Complete the page as it applies to you.
As you complete these forms, pay attention to the directions in each box. You will be required to attach supporting documents for some of the categories. Supporting documents include bank statements, car titles, deeds, retirement statements, loan statements, credit card statements, pay stubs, and proof of any other income. You can bind these to the Schedule of Assets and Debts or Property Statements, using a two-hole punch faster or a 3-hole binder. If your spouse agrees, you can provide them using a shared online folder or via email.
Complete the final step by serving your spouse the completed signed and dated forms, with the attached supporting documents. You can serve your spouse directly in person, by mail, or if your spouse agrees to accept the Disclosures via email. You do not need a server. Again, remember the method and date you provided your spouse with your forms. You will also want to make a duplicate copy of whatever you provide your spouse as a record you met your Disclosure requirements.
Completing a Preliminary and then again the Final may still feel unnecessary, especially if you are completing your divorce in a relatively short period of
time and with your spouse’s cooperation. There are a few limited situations in which you can waive the requirement to complete a Final.
First, you and your spouse can agree to waive the Final. You can waive the Final if you exchange a current I&E and update and include the value and character of the assets on your Schedule of Assets and Debts. Waiving the Final may save you some time from having to complete two separate sets of documents. In order for you to waive the Final, you must include a completed and signed “Stipulation and Waiver of Final Declaration of Disclosure,” FL-144, with your final agreement at the end of your case.
Remember, unless you are waiving the final declaration, you must complete and exchange the declarations of disclosure twice.
If you are not waiving the final and have completed your Preliminary, it’s time to complete the “Declaration Regarding Service,” FL-141. If you are waiving the Final, you will sign your Preliminary at the end since it will need to be updated and then complete the FL-141, and file it with your agreement at the end of your case.
Not only must you complete these forms, but you also have a continuous duty throughout your divorce to keep your spouse up-to-date on all property and financial issues. If you receive any investment or income-producing opportunities after the date of separation, like a new job or raise, you must disclose this to your spouse. You must also keep your spouse updated on all property and income information, even if your spouse has access to that
information. If you fail to keep your spouse informed during divorce, the court has the right to impose monetary penalties.
The disclosures and duty to disclose are legally required and are the foundation to your property negotiations. After you review your spouse’s Schedule of Assets and Debts or Property Declaration, you might find that you didn’t know about some property or debts, or that you disagree about the value of a property. Looking at your spouse’s I&E you can establish what money is available for support or how much money your spouse needs to pay expenses. Once exchanged, you can actually start property negotiations based on the information provided.
If your spouse is not participating in the divorce and you are finishing your divorce by default, you can finish the divorce without your spouse’s Preliminary. If your spouse is participating but refuses to complete the Disclosures, reach out to a divorce professional for advice. You don’t want to finish your divorce without these very important forms.
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