What’s the Difference Between a Preliminary and Final Declaration of Disclosure?

Navigating a divorce in California involves numerous legal requirements, and among the most critical is the exchange of financial information. This process officially begins with the Preliminary Declaration of Disclosure. For anyone going through a divorce or legal separation in California, understanding this crucial document is not just important – it’s mandatory and fundamental to achieving a fair outcome.

At Naimish Lewis Law, we guide clients through every step of the California divorce process, ensuring they meet their disclosure obligations and protect their financial interests.

What is a declaration of disclosure in California?

A declaration of disclosure is the mandatory exchange of financial information between spouses in a California divorce. It ensures both parties have a complete picture of each other’s income, assets, and debts before making decisions about property division or support. There are two stages in this process: the Preliminary Declaration of Disclosure and the Final Declaration of Disclosure.

What is a Preliminary Declaration of Disclosure in California?

In a California divorce, both spouses have a legal obligation to fully and accurately disclose all assets, debts, income, and expenses to each other. This is enshrined in California Family Code, which prioritizes transparency to ensure fair negotiations and equitable property division. The Preliminary Declaration of Disclosure (often referred to simply as “PDD”) is the first comprehensive set of financial documents exchanged.

The core purpose of the Preliminary Declaration of Disclosure in California is to:

• Establish a Baseline: It provides an initial snapshot of each party’s financial standing at the outset of the divorce proceedings.
• Promote Transparency: It ensures that both spouses have the necessary financial information to make informed decisions and negotiate a settlement fairly.
• Fulfill Legal Mandates: California law requires this disclosure, and failure to comply can lead to severe penalties.

It’s important to note that the Preliminary Declaration of Disclosure itself is not filed with the court (with limited exceptions). Instead, a separate form confirming its service is filed.

Key Forms for Your Preliminary Declaration of Disclosure in California

The Preliminary Declaration of Disclosure packet includes several required Judicial Council forms, but a packet comprised of several mandatory Judicial Council Forms, along with required attachments. When preparing your PDD, you will typically need:

1. Declaration of Disclosure (Form FL-140): This is the cover sheet for your disclosures. It declares, under penalty of perjury, that you have provided all required information and attachments. This form indicates whether it’s a “Preliminary” or “Final” disclosure.
2. Schedule of Assets and Debts (Form FL-142 or FL-160): This detailed form requires you to list all assets (property, accounts, investments) and debts (loans, credit cards) in which you have an interest, regardless of whether you believe them to be community property or separate property. You must identify each item and provide an estimated value for assets and amounts for debts.
3. Income and Expense Declaration (Form FL-150): This form provides a comprehensive overview of your income from all sources, your employment information, and your monthly expenses. This information is crucial for calculating temporary child support and spousal support orders.
4. Declaration Regarding Service of Declaration of Disclosure (Form FL-141): This is the crucial form you do file with the court. It simply tells the court that you have served your Preliminary Declaration of Disclosure and Income and Expense Declaration on the other party.
5. Required Attachments: These typically include:
   • Your most recent two years of state and federal income tax returns.
   • Recent pay stubs or other proof of income (usually for the last two months).
   • Statements for all bank accounts, investment accounts, retirement accounts (like 401ks), and credit card accounts.
   • Any other documents that support the financial information disclosed on your forms.

When is the Preliminary Declaration of Disclosure Due in California?

California Family Code § 2104(f) sets specific deadlines for serving the Preliminary Declaration of Disclosure:

• Petitioner: Must serve their PDD either concurrently with the Petition for Dissolution or Legal Separation, or within 60 days of filing the Petition.
• Respondent: Must serve their PDD either concurrently with their Response to the Petition, or within 60 days of filing the Response.

These deadlines can be extended by a written agreement between the parties or by court order for good cause. However, unlike the Final Declaration of Disclosure, the Preliminary Declaration of Disclosure cannot be waived by agreement of the parties in California.

Preliminary vs. Final Declaration of Disclosure in California

It’s common for clients to confuse the Preliminary and Final Declarations of Disclosure. While they share the same purpose of transparency, there are key distinctions in California law:

The Preliminary Declaration of Disclosure is a non-negotiable first step in nearly every California divorce case.

Consequences of Non-Compliance with California’s Preliminary Disclosure Requirements

Failing to properly complete and serve your declaration of disclosure in California can have severe and lasting repercussions. California Family Code prioritizes complete disclosure, and courts take violations very seriously. Penalties can include:

• Monetary Sanctions: The court can impose significant financial penalties, including ordering the non-complying party to pay the other party’s attorney’s fees and costs incurred due to the lack of disclosure (Family Code § 2107(c)).
• Evidentiary Sanctions: The non-complying party may be prevented from presenting evidence on issues that should have been covered in their disclosures. This can severely weaken their case.
• Award of Undisclosed Assets: If an asset is intentionally concealed, the court may award up to 100% of the undisclosed asset to the other spouse (Family Code § 2107).
• Setting Aside the Judgment: Perhaps the most drastic consequence is the court’s power to set aside, or undo, an entire divorce judgment if there was a material failure of disclosure or intentional concealment. This means your divorce could be reopened, even years later, if undisclosed assets come to light (Family Code § 2122).
• Perjury Charges: Signing these forms under penalty of perjury means providing false or incomplete information can lead to criminal charges.
• Delay of Proceedings: Failure to comply will undoubtedly stall your divorce, leading to increased legal costs and prolonged emotional stress.

Checklist: What to Gather for Your California Preliminary Declaration of Disclosure

To ensure you can accurately complete your Preliminary Declaration of Disclosure, begin gathering these documents as soon as possible:

• Tax Returns: Your federal and state income tax returns for the past two years.
• Proof of Income: Your last two months of pay stubs, W-2s, 1099s, and any other documentation of income (e.g., bonus statements, unemployment benefits, disability income, social security statements).
• Bank Statements: Statements for all checking, savings, and money market accounts (individual, joint, or business) from the past 12-24 months.
• Investment Statements: Statements for brokerage accounts, mutual funds, stocks, bonds, and other investments.
• Retirement Account Statements: Statements for 401(k)s, IRAs, pensions, deferred compensation plans, and any other retirement or deferred savings accounts.
• Credit Card Statements: Statements for all credit cards.
• Loan Statements: Statements for mortgages, home equity lines of credit, auto loans, personal loans, student loans, and any other significant debts.
• Real Property Information: Deeds, recent property tax statements, and mortgage statements for any real estate you own (including vacation properties or investment properties).
• Vehicle Information: Titles, registration, and loan information for all vehicles.
• Business Records: If you own a business, provide relevant financial statements, tax returns, and valuation documents.
• Life Insurance Policies: Information on cash surrender value, if any.
• Other Significant Assets/Liabilities: Any other assets (e.g., collectibles, jewelry, intellectual property) or liabilities not covered above.

Seek Experienced Legal Guidance for Your California Preliminary Declaration of Disclosure

The Preliminary Declaration of Disclosure is more than just paperwork; it’s a cornerstone of the California divorce process and carries significant legal weight. Errors or omissions, even unintentional ones, can lead to serious consequences.

An experienced California divorce attorney can help you:

• Understand and fulfill your specific declaration of disclosure obligations under California Family Code.
• Gather and organize all necessary financial documents.
• Accurately complete the required Judicial Council Forms (FL-140, FL-142/FL-160, FL-150, FL-141).
• Avoid common pitfalls and potential sanctions.
• Strategically use the disclosures to achieve a fair and equitable settlement.

Don’t navigate the complexities of financial disclosures in a California divorce alone. Contact Naimish Lewis Law today for a consultation to ensure your Preliminary Declaration of Disclosure is handled correctly, protecting your financial future.