Disclosure of Assets and Liabilities in Family Law Cases

Division 6, Part 1, Chapter 9 deals with the disclosure of assets and liabilities in nullity, dissolution, and legal separation cases.

Section 2100 contains three legislative findings and declarations, including that sound public policy further favors the reduction of the adversarial nature of marital dissolution and the attendant costs by fostering full disclosure and cooperative discovery.

Section 2101 defines the following terms: “asset,” “default judgment,” “earnings and accumulations,” “expenses,” “income and expense declaration,” and “liability.”

Section 2102 specifies that, from the date of separation to the date of the distribution of the community or quasi-community asset or liability in question, each party is subject to the standards provided as to all activities that affect the assets and liabilities of the other party, including three specified activities.

From the date that a valid, enforceable, and binding resolution of the disposition of the asset or liability in question is reached, until the asset or liability has actually been distributed, each party is subject to the standards provided as to all activities that affect the assets or liabilities of the other party.

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 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.

Section 2103 provides 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 of the parties is required to serve on the other party a preliminary declaration of disclosure, unless service of the preliminary declaration of disclosure is waived or is not required, and a final declaration of disclosure, unless service of the final declaration of disclosure is waived, and must file proof of service of each with the court.

Section 2104 states that each party is required to serve on the other party a preliminary declaration of disclosure, executed under penalty of perjury on a form prescribed by the Judicial Council. The commission of perjury on the preliminary declaration of disclosure may be grounds for setting aside the judgment. The preliminary declaration of disclosure must include all tax returns filed by the declarant within the two years prior to the date that the party served the declaration.

The preliminary declaration of disclosure cannot be filed with the court, except on court order. It must set forth with sufficient particularity, that a person of reasonable and ordinary intelligence can ascertain, all of the specified information. A declarant may amend the preliminary declaration of disclosure without leave of the court. Proof of service of an amendment must be filed with the court.

Section 2105 specifies that, before or at the time the parties enter into an agreement for the resolution of property or support issues other than pendente lite support, or, if the case goes to trial, no later than 45 days before the first assigned trial date, each party, or the attorney for the party in this matter, is required to serve on the other party a final declaration of disclosure and a current income and expense declaration, executed under penalty of perjury on a form prescribed by the Judicial Council, unless the parties mutually waive the final declaration of disclosure. 

The final declaration of disclosure must include all of the four specified items of information. In making an order setting aside a judgment for failure to comply with this section, the court may limit the set aside to those portions of the judgment materially affected by the nondisclosure. The parties may stipulate to a mutual waiver of the requirements concerning the final declaration of disclosure. The waiver must contain five specified items.

Section 2106 prohibits judgment from being entered with respect to the parties’ property rights without each party, or the attorney for that party in this matter. Each party, or the party’s attorney, must execute and file with the court a declaration signed under penalty of perjury stating that service of the final declaration of disclosure and current income and expense declaration was made on the other party or that service of the final declaration of disclosure has been waived.

Section 2107 provides that, if one party fails to serve on the other party a preliminary declaration of disclosure, unless that party is not required to serve a preliminary declaration of disclosure, or a final declaration of disclosure, or fails to provide the information required in the respective declarations with sufficient particularity, and if the other party has served the respective declaration of disclosure on the noncomplying party, the complying party may, within a reasonable time, request preparation of the appropriate declaration of disclosure or further particularity.

If the noncomplying party fails to comply with a request, the complying party may do one or more of three specified actions. If a party fails to comply with any provision of this chapter, the court is required to impose money sanctions against the noncomplying party. 

Section 2108 states that, at any time during the proceeding, the court has the authority, on application of a party and for good cause, to order the liquidation of community or quasi-community assets so as to avoid unreasonable market or investment risks, given the relative nature, scope, and extent of the community estate.

Section 2109 says that the provisions of this chapter requiring a final declaration of disclosure do not apply to a summary dissolution of marriage, but a preliminary declaration of disclosure is required.

Section 2110 provides that, in the case of a default judgment, the petitioner may waive the final declaration of disclosure requirements provided in this chapter, and not be required to serve a final declaration of disclosure on the respondent nor receive a final declaration of disclosure from the respondent.

Section 2111 states that a disclosure required by this chapter does not abrogate the attorney work product privilege or impede the power of the court to issue protective orders.