What are the California Declarations of Disclosure & Why Are They So Important?

If you have been divorced in the past or you are currently going through a divorce, you have likely heard reference to the “disclosures” or the “PDOD’s.” There is often confusion around these mysterious papers, so today, I am here to try and take all the mystery away and give you some specific information about the PDOD’s, as you will be asked to complete them for us when you begin the divorce process. Here are the answers to frequently asked questions.

What exactly are disclosures? What are we being asked to disclose?

Declarations of Disclosure are made up of a few different documents that will ask you and your spouse to list any assets you have, any debts you have, describe your income and cash flow status, and disclose any information you may have of upcoming investment opportunities, etc. The court themselves have created documents for this purpose known as the Schedule of Assets and Debts and the Income and Expense Declaration (among others). However, depending on whom you work with, the format of the disclosure documents may vary. For example, some offices will include a more detailed budget for the parties to complete (the budget portion of the court documents leaves out many expenses and has not been updated to reflect the current way some bills are handled). Additionally, we have also taken the Schedule of Assets and Debts in our office and turned it into a financial packet to provide more guidance as you weed through the document. All the same, information is requested and ultimately used to populate the required court forms. Our financial packet is signed under the penalty of perjury (see more on this below), just as the court required documents are. This ensures that the individual completing the document is as forthcoming as possible with all information available to them. We use this packet as we have found it to be a bit less intimidating to our clients, and we usually have much less resistance to our financial packet than we used to get to the court documents.

Do we have to disclose separate property also? Why?

Yes. All assets and debts need to be disclosed regardless of whether they may be community, separate, or a combination of both. Sometimes there is confusion as to whether an asset is joint or separate. We can discuss each asset together and categorize each asset, debt, or liability properly by listing everything.

We already know and have agreed on how to divide our assets and debts, so why do we need to complete them?

The exercise of providing this information to each other is to show good faith and fair dealing with each other, and it is to show you are both being open and honest with each other. The purpose of each spouse having all the financial information available to them is to allow them to make informed decisions throughout the dissolution process. Many of the decisions made in a divorce will continue to impact the lives of the divorcing couples for many years following the divorce and often, forever. Therefore, each spouse must have as much information as possible to ensure they are not making decisions that later turn out to be poor decisions because they were not aware of the whole financial picture. It is not uncommon for a divorce to begin with one spouse having little to no clue how much the estate is worth and, once learning of the size of the estate, have a complete shift in their goals for the divorce. To make well-informed decisions, everyone needs to be on the same page, full of the same knowledge.

We are in mediation – I thought we didn’t have to follow the court rules in mediation?

There are still a couple of rules that must be followed in mediation because California requires them. Exchanging your financial information is one of them. Regardless of whether you decide to handle the divorce on your own, hire an attorney or go through mediation, the financial disclosures must be exchanged. Otherwise, the final judgment can be overturned, and you will have to start the whole process over.

Doesn’t my spouse have to serve their disclosures on me within 60 days of filing the petition?

Typically, yes. However, in mediation, you can agree to an alternative timeline for exchanging the disclosures. Or you can decide to remain within the court-imposed timelines. This is one of the factors you can modify based on the needs of you and your spouse in mediation.

When do we have to have the disclosures completed?

If you are following the court’s-imposed deadlines, the Petitioner has 60 days from filing the petition, and then the Respondent must complete their disclosures within 60 days of filing their Response. Otherwise, the timeline is up to the two parties to agree upon themselves.

What if I don’t know the value of an asset?

If a spouse is unsure about an asset’s value, they need to do due diligence to determine its value. The same rules apply to debts and liabilities. It is common in a preliminary declaration of disclosure to place the value of an asset that has not yet been valued or appraised as “unknown.” If this happens, the spouse MUST do whatever is necessary to become informed regarding its value and share that information ASAP.

What if I don’t have the documentation for the asset? My spouse handled all of that throughout the marriage?

It does not matter who is in possession of the asset or whose name the asset is in. If you know of the asset, you must provide the asset on your documents. You can make a note *spouse has access to supporting documents* but make sure to provide the asset and explain that you do not have access.

What does it mean to sign “Under the Penalty of Perjury”? What are the consequences if I forget to include an asset?

This is the essential part of the disclosures to understand – Everything in the preliminary declaration of disclosure must be signed and dated under penalty of perjury. Committing perjury by providing false information or even unintentionally providing incomplete or incorrect information can have significant consequences on a divorce settlement and judgment later on, including a partial or complete set aside of the terms impacted by the nondisclosure or incorrect disclosure. I.e., you may have to start the process all over or may lose an asset in its entirety if the court finds you INTENTIONALLY withheld information. It is not worth the risk – always error on disclosing TOO much, rather than NOT enough!

What if I make a mistake? How can I fix it?

Just let your mediator know as soon as you realize the mistake and fix the error. DO your best to review everything PRIOR to final judgment carefully. Once judgment is entered, your ability to correct a mistake is not as easy.

What happens if, throughout the mediation, the value of an asset changes (i.e., real estate in San Diego!)

Even before there is a final declaration of disclosure, both spouses have a duty to update the disclosures if circumstances affect the assets, debts, or liabilities. These can include a change in value or investment opportunities, to name a couple of examples. This duty of ongoing disclosure continues from the date the spouses separate to the date the asset is distributed. Suppose you are in mediation and are continuously discussing the assets and the varying values. In that case, you do not need to worry about filing an amended disclosure every time an asset changes value (think 401k or other investment – they can vary daily). Just be sure to inform your spouse and mediator so everyone is aware of the change if you are unsure of whether something needs to be discussed – error on discussing. The worst that can happen is you didn’t need to discuss.

Mediation for Financial Disclosures

Need to discuss your financial disclosures? Contact San Diego Family Mediation Center today to schedule a free consultation.

by: Jennifer Segura

Jennifer Segura with west coast family mediation center
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