Divorce Disclosures Are Serious Stuff

hl-admin Blog, Community property, Family law procedure, John Harding, Property division 0 Comments

As part of every California divorce each spouse is compelled to complete and exchange declarations of disclosure that list all property and debt. Some lawyers take shortcuts when preparing the disclosures for their clients.  We don’t at Harding & Associates Family Law! Our clients spend a lot of time with us making sure that there disclosures are done 110%.  Here is the latest in a long string of court opinions validating our practice.

Leslie and Terry were married for 27+ years. Leslie was a homemaker and Terry was a Chico Police officer.  In 2008 Terry filed for divorce. The court awarded temporary spousal support and entered judgment terminating the marriage. Trial continued on the issues of permanent support, division of Terry’s retirement and employment benefits, property division, and attorney fees. One of Terry’s benefits was a retiree medical reimbursement plan (the Plan). Terry had not disclosed the Plan in his mandatory disclosures, relying on the excuse that it had no value, and thus did not need to be disclosed. At trial Leslie asked for sanctions against Terry for his failure to disclose the Plan. The trial court denied the request, and Leslie appealed.

The Appellate Court ruled in Leslie’s favor; and that opinion reminds us how important California’s mandatory disclosures are, and why no shortcuts can be taken when preparing those disclosures. The trial court erred in finding that Terry was not obligated to disclose the Plan. Whether it had value or not is irrelevant. The Appellate Court reminds us that in order to provide full and accurate disclosure of all assets and liabilities in which one or both parties may have an interest, each party to a proceeding for dissolution of the marriage or legal separation shall serve on the other party a preliminary declaration of disclosure under Family Code §2104 and a final declaration of disclosure under Family Code §2105. A party’s preliminary declaration of disclosure must identify all assets and liabilities in which the declarant may have an interest, regardless of the characterization of the asset as community or separate property. (Family Code §2104(c)(1)) For purposes of this requirement, the term “[a]sset” includes, but is not limited to “any real or personal property of any nature, whether tangible or intangible, and whether currently existing or contingent.” (Family Code §2101(a)) This requirement is not dependent upon the declarant’s opinion of value. In this case, the Plan qualified as an asset regardless of its value, and Terry needed to disclose whether he wanted to or not, and whether he thought it had value or not.

If a party fails to comply with the disclosure requirements, the trial court “shall…impose money sanctions against the noncomplying party. Sanctions shall be in an amount sufficient to deter repetition of the conduct or comparable conduct, and shall include reasonable attorney’s fees, costs incurred, or both, unless the court finds that the noncomplying party acted with substantial justification or that other circumstances make the imposition of the sanction unjust.” (Family Code §2107(c))

The message from this case is clear: DO NOT TAKE ANY SHORTCUTS ON DISCLOSURES. Err on the side of over-disclosing. If you question whether it should be disclosed or not, drop the question and make the disclosure.

You can read the original Appellate Court opinion in Moore by clicking here.

The Moore opinion does a great job of explaining all of the different benefits that Terry earned as a police officer and how those benefits are measured at time of divorce. It is a great educational opinion for dividing community property.

For more information on California Family Law please visit hardinglaw.com.

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