Under California Law, if you are signing a pre-nuptial agreement or getting a divorce, you are required to fill out your preliminary declarations of disclosure and exchange them with your spouse. The reasons for this are so that everyone is on the same page when they are going into a marriage or getting out of one. Accurately disclosing your current income and expenses, as well as your assets and debts makes for a fair assessment of the marital property because each side knows what assets and debts exist.
Disclosing your assets and debts also helps promote a settlement and ensures for an open resolution of property without any surprises. Often, there is one spouse who has a better understanding of the finances because they either took care of all the financials or did not allow the other spouse to have access to the finances. It is important to disclose everything so the spouse who did not have control of managing the finances understands his or her rights to the community property.
You will need to fill out mainly two documents: First the Income and Expense Declaration which asks for your employment information as well as your current income. You will need to attach your recent paystubs and two years worth of tax returns as supporting documents to the Income and Expense Declaration. Then you will fill out a series of household expenses that you are currently paying or proposing you will pay once the divorce is final. Although these are estimated expenses, you need to try and be as accurate as possible and include all recurring expenses such as credit cards, car payments, student loans, and medical debts.
Next, you will need to complete a Schedule of Assets and Debts in where you will describe all of your real property and personal property and assign Fair Market Values with supporting documentation. This requires a bit of work on your part to gather all of the necessary information on property, bank accounts, retirement accounts, investment accounts and vehicles. Then you will do the same for all debts, which may include credit cards, back taxes, student loans, personal loans, medical debts, etc. You will need to provide current statements to prove the debt exists.
Once you have completed these forms and provided supporting documents, you will need to exchange all information with your spouse and they will do the same. A lot of it may be the same (i.e. tax returns, bank statements, etc.) but you still need to include it. At this point, you will be able to enter into a pre-nuptial agreement or eligible to begin settlement negotiations and possibly enter into a Marital Settlement Agreement if you are getting divorced.
For assistance with your family law pre-nuptial agreement or divorce and financial disclosures, contact Cage & Miles, LLP at (858) 376-7251 to speak with an experienced Family law attorney.