Divorce in California

In California dissolution cases, both parties have a duty to complete a Declaration of Disclosure which includes the list of the assets and possessions that each party has, called a Schedule of Assets and Debts. Of course, that doesn’t mean you need to account for every book or drink you have in your hand, but you do need to make known to your soon-to-be ex-spouse of your bank accounts and any other kind of deferred income you may have. If you don’t, then the spouse that you’re hiding the assets from can always go back to court and ask that the missing asset be divided under Family Code 2556:

In a proceeding for dissolution of marriage, for nullity of marriage, or for legal separation of the parties, the court has continuing jurisdiction to award community estate assets or community estate liabilities to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a post judgment motion or order to show cause in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. In these cases, the court shall equally divide the omitted or unadjudicated community estate asset or liability, unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset or liability.

In California, there is no such thing as “inquiry notice”, thus you have a duty to disclose your information without the request of your spouse. There are cases, however, in which there’s a missing asset like a delayed payment which happened after the Judgment. In situations like this, the justice will award 100% of that undisclosed income or undeclared community property to your spouse, because it would be analyzed as a concealed or hidden asset that you did not reveal in your Declaration of Disclosure. In a marital dissolution case, each spouse has a fiduciary duty to the other “to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization and valuation of all assets in which the community has or may have an interest and debts for which the community is or may be liable, and to provide equal access to all information, records, and books that pertain to the value and character of those assets and debts” (Family Code 1100 (e)). That means that, differences aside, each soon-to-be ex-spouse needs to be truthful with the other and inform the opposite spouse of their expenditures and assets, as part of “a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other” (Family code 721(b)). If you fail to disclose the value of assets or the valuation of community property, then you have violated that duty of disclosure, such as in Marriage of Brewer & Feredici (2001) 93 CA4th 1334, 113 CR2d 849, where the wife’s failure to disclose the value of her pension plans breached her duty of disclosure. The Court ruled against her because she had access to that kind of information and deliberately withheld it from her spouse and the courts. 

Now, in a situation where you deliberately refuse to disclose the existence of an asset that you’re aware of to your spouse or the Courts, consider it already 100% awarded to your soon-to-be ex-spouse. Take for example the case of Marriage of Rossi (2001) 90 Cal. App. 4Th 34; 108 Cal. Rptr. 2D 270, in which the wife did not disclose the lottery winnings to her husband because she wanted to keep them for herself. The courts founded that “the concealment constituted fraud under Civ. Code 3294, and came within the penalty provisions of Family Code 1101 (h).” In other words, the husband was awarded 100% of the lottery winnings simply because “the wife intentionally failed to disclose her lottery winnings in the marital settlement agreement, the judgment, and her declaration of disclosure.” In other situations, the Court may divide assets that were not disclosed. After all, Family Code 2556 is not limited to just values that are omitted, like in Marriage of Melton (1994) 28 Cal. App. 4Th 931; 33 Cal. Rptr. 2D 761.

Some parties just like being difficult to deal with and in some cases they just don’t play fair and fail to comply with the rules set out under the Family Code. There’s a rule out there for those kind of people, as well: 

If a party fails to comply with any provision of this chapter, the court shall, in addition to any other remedy provided by law, 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 aforementioned is a powerful statement, because it imposes money sanctions—which are related to punitive damages—against parties that deliberately and knowingly breach their fiduciary duty to one another during separation proceedings. One such case was Marriage of Feldman (2007) 153 Cal. App. 4Th 1470, in which the husband failed to disclose relevant facts about his assets and possessions, and so the Court upheld $250,000 in sanctions and $140,000 in attorney fees, under Family Code 271 and 2107. 

Family law is where you see the best people on their worst behavior, and divorce can be a messy deal, but only because the people involved in it make it that way. It’s easy to say, “Let’s shake hands, what’s mine is mine and what’s yours is yours, and let’s go our separate ways,” but in a capitalistic society such as ours—and in a failing economy like this—we manage to turn our best friend into our worst enemy. The Courts have one expectation when it comes to marriage dissolution, nullification, or separation: take your responsibility to disclose your assets, debts, and properties seriously. And don’t lie! There will always be a she-said-he-said story to tell to the Judge, but the law is blind of compassion. If you’re going to play dirty, then know ahead of time that you lost before you even begun because one way or another, the law or the opposing party will find out what you’re hiding and how much is under your mattress, and once they do, you might as well kiss your favorite ride or that mistress’ apartment good-bye.