In California, when someone has commenced a divorce or legal separation agreement, financial disclosures are required by both parties. Specifically, each party must disclose assets, debts, income and expenses, regardless of whether the property, income or debt is believed to be separate property or community property. It also does not matter that the property, income or expense was received PRIOR to the date or marriage or AFTER date of separation. Everything is disclosed…period.
The purpose of the disclosure rules is so people can make informed decisions regarding the financial aspects of their case, including property division, child support and spousal support.
Some people discuss their case to potentially come to agreements BEFORE filing for a divorce or legal separation. Sounds smart, right? Get a head start, right? Well, this is not likely a prudent decision. Why? Because you are negotiating blindly and without fully understanding the application of California law to your case.
In a case called Marriage of Evans (2014) 229 Cal.App. 4th 374, the Court ruled that an agreement reached BEFORE someone files for a divorce or legal separation where disclosures were NOT exchanged by either party is ENFORCEABLE. It does not matter if either party later discovers that property was higher or lower than what was believed at the time of the agreement, for example.
The moral of this story is two-fold:
- First, do NOT come to agreements regarding a prospective divorce or legal separation case without having first exchanged disclosures, unless you want to take the risk that you may sell yourself short by negotiating blindly.
- Second, speak with an attorney BEFORE you reach agreements regarding financial rights, including property division, spousal support or child support. Even if you have the facts, you should be informed of how the law applies to those facts BEFORE you sign off on an agreement.
Education and analysis first. Decisions will come later, in due time.