Is the Preliminary Declaration of Disclosure REALLY that important?

I regularly volunteer for Contra Costa County’s Pro Per clinic, which is a program designed to help self-represented litigants through their divorce. The clinic itself covers two major topics: 1) Starting your dissolution; and 2) Finalizing your dissolution. During the “starting” clinic, I spend the majority of my with the participants on their Preliminary Declaration of Disclosure, commonly referred to in the legal industry as PDD’s or financials. The PDD’s are required in order to obtain a dissolution of a domestic partnership or a dissolution of marriage, and they are therefore of utmost importance. They consist of four documents: FL-150, Income and Expense Declaration; FL-142, Schedule of Assets and Debts; FL-140, Declaration of Disclosure; and FL-141, Declaration Regarding Service of Declaration of Disclosure and Income and Expense Declaration. The absolute number one question I am asked relating to the PDD’s is whether or not there really has to be a full financial disclosure. The answer is an unequivocal yes!! I see absolutely no reason for there ever to be an exception to this answer. No, it does not matter if you have a full agreement. No, it does not matter if you absolutely certain the other person knows everything the two of you own. No, it does not matter if you think it’s a waste of time. Do it anyway! I fully understand that completing your PDD’s is time consuming. I get that it’s a lot of work. I realize that it seems like a waste of time. Understand though that the Declaration of Disclosure, form FL-141, is a declaration under penalty of perjury that you have provided a full financial disclosure. Aside from the potential of perjuring yourself, there is a very practical reason for completing accurate financials. If you are attempting to complete your dissolution on your own, the PDD’s provide a fantastic outline for listing everything you own and everything you owe, which in turn, makes divvying up the assets and debts that much easier. It also serves as a way of “jogging your memory.” I have had clients who have forgotten about that 403(b) plan they contributed to for 3 years right out of college, stocks given to them by their parents, or other such assets that, while small or separate property, are nevertheless assets. It was only in filling out these forms that they remembered them. For those represented by attorneys or considering representation, the financials are no less important. I personally find myself using those documents as an outline for drafting settlement proposals. So long as they are accurate, it’s a failsafe method for ensuring that all assets and debts are taken into account when finalizing a dissolution. I can’t count the number of times I’ve attended a meeting with my client, the opposing party, and opposing counsel, and we end up going through the Schedule of Assets and Debts item by item in trying to reach a property settlement. I routinely rely on my client’s financial disclosures in order to ensure a complete and fair division of property items. If you still have doubts as to whether or not it’s worthwhile to complete your disclosures accurately, consider Thomas and Denise Rossi. The very short version of the story is this: Denise won the lottery and filed for a divorce from Thomas before ever receiving her first check. She didn’t disclose her lottery winnings in any of her financials as either separate or community property. The parties reached an out-of-court settlement agreement. A couple of years later, Thomas happened to discover Denise’s winnings. He filed a motion to set aside the divorce judgment and ultimately succeeded. What did that mean for Denise? First of all, 100% (versus the maximum 50% had she disclosed the winnings) of the money went to Thomas. Since years had elapsed, that not only meant that the future payouts went to Thomas, but that Denise actually owed him for the years that she had already been paid by the lottery commission. Oh, and the extra salt in her wounds? She was ordered to pay for his attorney fees. See In re Marriage of Rossi (2001) 90 Cal.App.4th 34. The moral of the story is this: do your disclosures, and do them right.