Financial transparency is a major part of the California divorce process. Before property and financial issues can be fully resolved, spouses generally must exchange information identifying their assets, debts, income, and expenses. One of the key steps in this process is completing the preliminary declaration of disclosure.

These disclosures help both spouses understand the financial issues that may need to be addressed before reaching a settlement or proceeding toward judgment.

What Information Must Be Disclosed?

A preliminary declaration of disclosure is intended to identify the assets and liabilities in which a spouse has or may have an interest.

Importantly, disclosure is required regardless of whether a spouse believes a particular asset is community property or separate property. A spouse should not simply leave an asset off the disclosure because they believe the other spouse has no ownership interest in it.

When property or a debt is not solely owned by one or both spouses, the disclosure must also identify the person’s percentage of ownership or responsibility.

The preliminary disclosure may additionally state whether a spouse believes an asset or debt is community or separate property.

What Documents Are Included?

The preliminary declaration of disclosure is not simply a single list.

It generally involves a declaration of disclosure together with detailed information concerning assets and debts. The required financial information also includes tax returns filed during the two years before the declaration is served and a current income and expense declaration, unless a current and valid one has already been provided.

Common assets that may need to be identified include real estate, bank accounts, retirement accounts, investments, vehicles, business interests, and valuable personal property.

Debts must also be addressed. These can include mortgages, credit cards, vehicle loans, personal loans, and other financial obligations.

Disclosure Does Not End After the First Exchange

Completing preliminary disclosures does not necessarily end a spouse’s responsibility to provide financial information.

California imposes a continuing duty to update and augment disclosures when material changes occur. That duty can be especially important when circumstances change while a divorce remains pending.

For example, new information concerning an asset, liability, business opportunity, income-producing activity, or other significant financial matter may need to be disclosed rather than saved until the end of the case.

Accurate Disclosures Help Move a Divorce Forward

Incomplete disclosures can create significant problems. They may delay resolution, interfere with property division, and lead to requests for additional information or court involvement.

Preparing disclosures carefully can also help a spouse identify missing documents or unresolved financial questions early in the divorce. Instead of viewing disclosure as paperwork that simply needs to be completed, it can be useful to treat the process as an opportunity to build an accurate financial picture of the marriage.