Financial Disclosure is Mandatory During a Divorce
California divorce courts require parties to make financial disclosures during a divorce. It is not necessary for a party’s divorce lawyer to affirmatively request general or specific information in a family law matter. Failure to voluntarily make the disclosure of all material facts can result in significant financial or evidentiary sanctions in a divorce. Sanctions may be ordered at any stage of the divorce proceedings. They can be designed to motivate future disclosure and punish bad conduct.
The fact that a spouse may know about an asset or a specific material fact does not excuse the other spouse from the duty of full disclosure. The fact that the failure to disclose occurs before a divorce trial or settlement of the relevant issues does not prevent sanctions from being ordered.
Parties cannot waive the statutory Preliminary Declaration of Disclosure. Even if the parties waive the statutory “Final Declaration of Disclosure,” the duty to make the financial disclosures in the divorce still exists. The waiver of the exchange of the declarations does not eliminate or reduce the duty to disclose all material facts and information. The duty to disclose all material financial facts exists throughout the divorce process and in some situations continues after the entry of the divorce judgment.
There often is a question as to what must be disclosed. “Material” facts and information must be disclosed in a divorce. The question as to what must be disclosed may be answered by asking what information would a reasonably prudent person want to know in order to make well-reasoned, informed, and intelligent decisions about the financial issues involved in the divorce.
In re Marriage of Feldman (2007) 153 Cal.App.4th 1470