Duty to Disclose During Divorce

Posted January 29, 2018

Clients often ask one of the two following questions:

1. What if my spouse is hiding money, property, or other assets from me, such as a bank account or expensive jewelry?

2. Do I need to let my spouse know about all the money, property, and other assets I have, such as any monetary gifts I receive from my parents?

Divorcing spouses owe several obligations to each other during the divorce process. One such obligation is the “continuing duty to disclose.”

Initial and Final Disclosures

Soon after filing divorce papers, both spouses are required to disclose information to the other spouse, with few exceptions. Each spouse has to declare in writing all assets in which the declaring spouse has an interest, and all liabilities for which the declaring spouse is or may be liable. These assets and liabilities must be disclosed regardless of whether they are community or separate property. Each spouse must provide specific income and expense information as well. Each spouse is required to produce initial “preliminary” disclosures and “final” disclosures at a specific time during the divorce proceedings.

Continuing Duty to Disclose to Spouse

Spouses often forget that although they have disclosed all their assets, debts, income, and expenses, their actions may affect the assets and liabilities of the other spouse. Until the date the particular asset is distributed between the spouses, each spouse must continuously disclose to the other spouse activities that may affect the assets and liabilities of the other. This continuous duty requires each spouse to update and augment information if material changes occur.

Further Reading » Divorce and Your 401(k) Retirement Plan: Understanding Division and Implications in California

Consequences for Failing to Disclose

Failing to disclose the required information has several negative consequences. Depending on the status of your divorce case, the court may decide not to enter a judgment, and therefore your property will not be distributed. If nondisclosure is discovered after judgment is entered, the court may set aside the judgment, thus bringing your case back to court to “fix” the problem. The court also may order monetary sanctions, attorney’s fees, and/or other penalties.

Determining what information is relevant and how to produce it is not always clear. As stated above, failure to adequately disclose information can have various adverse consequences. An attorney can help you determine the proper method to provide the required information.

There is a time limit to request the court to set aside a judgment. We recommend contacting an attorney as soon as you discover your ex-spouse failed to disclose information to ensure your legal rights are protected. Each individual situation requires an analysis of its specific facts and circumstances.

Our family law team at Naimish & Lewis can advise you on this and other dissolution and divorce-related matters. To schedule an initial consultation with an attorney at our firm, please contact us.

Divorce

Robert J. Allison, Esq.

Mr. Allison is a resolution-oriented associate attorney in our Family Law Practice. Even-keeled and fact focused, he is able to assist our clients understand their rights and obligations through the stress and smoke and mirrors presented in their divorce, custody, and domestic violence matters. During the initial consultation, and again once facts and evidence have been collected, Mr. Allison provides various strategies to help clients present their cases, considering cost, time, and client needs. He prides himself in not making false promises to his clients and is unafraid to speak the raw and sometimes harsh reality of how a Court will decide a matter given a specific set of facts and circumstances, both to his clients and to opposing parties. Many potential clients share that they are unhappy with their previous attorneys because they felt a lack of communication, an uncertainty about the family law process and timeline, and they do not understand the strategy in their case or the invoices they receive. While the legal process is complex, Mr. Allison attempts to reduce the confusion through a reasonable case management process involving client participation, because a family law case is often the most difficult period of time in a client’s life.