calculator, spreadsheet, pen, financial disclosures

Hi, I’m Claudia Brown Coulter with Pivotal Peace. I’m your go-to mediator for navigating divorce while parenting children with special needs, and I’m also a legal document assistant based in Los Angeles, California. Welcome to Step Two Tuesdays. Today, we’re diving into what you need to do in step two of your divorce process. Divorce typically happens in three phases, or steps, and step two often trips everyone up: financial disclosures.

Don’t Rush, But Don’t Procrastinate

First things first, don’t rush this process. Not rushing doesn’t mean procrastinating. Take your time to make this decision, but once you’ve decided it’s time, then it’s time. Financial disclosures can feel overwhelming, but starting early can make the process more manageable.

Early Preparation

In California, if you are the petitioner, you can file your petition for divorce or legal separation and your financial disclosures all at the same time. Getting this paperwork done early is beneficial. So, what exactly do you need to include in your financial disclosures?

What Financial Information Do I Need to Disclose?

In short, all of it. When people ask, “Should I include this? Should I include that?” the answer is yes. Don’t commit fraud; do not lie. You are signing these forms under the penalty of perjury that what you’ve put on them is true and accurate. In an amicable divorce using mediation, there is no formal discovery process like in contentious legal battles, so honesty is paramount. You need to disclose everything you know about, and your spouse needs to do the same.

Assets and Debts

Let’s run down a list of things you need to disclose. The courts want to know about all your assets and debts. Essentially, they want to know everything you own and owe.

Assets to List

  1. Real Estate: Any property you own.
  2. Household Furnishings: Furniture, appliances, and other valuable household items.
  3. Jewelry, Antiques, and Art: Items that have significant value and could appreciate over time.
  4. Vehicles: Cars, boats, trailers, RVs, and anything else insurable.
  5. Bank Accounts: Savings and checking accounts.
  6. Investments: Stocks, bonds, mutual funds, and retirement accounts.
  7. Life Insurance: Policies with a cash surrender value or loan value.
  8. Business Interests: Shares in a business or full ownership.
  9. Expected Assets: Future tax returns, annuities, deferred compensation.
  10. Other Assets: Anything else of value, including collectibles.

Debts to List

  1. Mortgages: Loans secured by property.
  2. Student Loans: Educational debts.
  3. Credit Cards: Any outstanding balances.
  4. Personal Loans: Money owed to individuals, like family members.
  5. Taxes: Outstanding IRS debts or other tax obligations.
  6. Child or Spousal Support: Arrears from previous marriages.
  7. Other Debts: Any other financial obligations.

Income Information

In addition to your assets and debts, you need to disclose your income. This includes:

  1. Employment: Where you work, your job title, and your salary.
  2. Business Income: If you own a business, disclose your earnings.
  3. Rental Income: Any income from rental properties.
  4. Other Income: Any other sources of income.

You will need to attach two months of pay stubs. If you’re self-employed or a business owner, provide two years of profit and loss statements or your latest tax return with a Schedule C.

The Purpose of Financial Disclosures

The goal of these disclosures is to ensure equitable distribution of assets and debts. This transparency helps prevent one spouse from hiding assets or unfairly burdening the other with debts. It’s not about making the process harder, but about fairness.

Getting Help

If this feels overwhelming, don’t worry. You can get help. As a legal document assistant, I can help you fill out these forms. You can also visit your local courthouse’s self-help desk for instructions. Remember, you don’t have to go through this alone.

Final Thoughts

Financial disclosures are a crucial step in the divorce process. They ensure that both parties have a clear and honest understanding of their financial situation, leading to fairer settlements. If you need assistance, don’t hesitate to reach out. I’m here to help you navigate this process smoothly.

For more information or to schedule a phone call, click here. If you found this information helpful, please like, subscribe, and share this blog post. You don’t have to walk this journey alone. Together, we can make it manageable. Have a great day!