DISCLOSURE REQUIREMENTS, PART 1

YOU MUST DISCLOSE YOUR INCOME IN THE DIVORCE PROCESS.

     Divorce is not a game of poker.  You don’t get to “hold” your financial cards.  Instead, you must disclose, disclose and disclose.  Think of divorce as a game of poker where all the cards are face up.  Failure to disclose may result in you being hit with serious monetary sanctions.

     In this article, I will give a brief overview of the disclosure requirements regarding income.   Future articles will deal with property, debts and investment opportunities, business opportunities and income-producing opportunities.

     Family Code section 2102 ( c) states: “From the date of separation to the date of a valid, enforceable, and binding resolution of all issues relating to child or spousal support and professional fees, each party is subject to the standards provided in Section 721 as to all issues relating to the support and fees, including immediate, full, and accurate disclosure of all material facts and information regarding the income or expenses of the party.”

     What does this mean?  Simply put, as you are going through the divorce process you must immediately disclose to your spouse all material facts and information regarding any change in your financial circumstances and that disclosure must be full and accurate.  With regard to income, if if pending your divorce you receive a raise, you must report that raise to your spouse fully, accurately, and immediately.  Failure to report may result in monetary sanctions against you.  Likewise, you would report any drop in income or loss of employment, but nearly everyone is quick to report that.

     The duty to disclose income continues from the date of separation through the date your divorce is final.  Some even argue that in cases where child and spousal support are involved, this duty to disclose income continues after the divorce is final—until support is no longer an issue.  I do not share that view because the California Family Code allows each party to demand an exchange of income and expense information and tax returns from the other party once per year after a divorce is final.  You can also build this requirement into your divorce agreement or ask the Court to order the other party to report their income more than once per year, if the circumstances warrant that.  Still, even if your divorce is over and you receive a big raise that would impact support, you might want to consider giving your ex-spouse the information voluntarily, rather than wait until she/he finds out and takes you back to Cour for more child support.  You may be able to settle out of Court and save money that way.

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For more information, please call Philip A. Wasserman at 661-294-8484 or email him at pawlaw@earthlink.net.