The Preliminary Declaration of Disclosure in a California Divorce

Every California divorce runs on financial disclosure. Whether the case is uncontested and heading for a stipulated judgment, or contested and heading for trial, both spouses have to disclose their assets, debts, income, and expenses to each other. That obligation is not optional and it is not paperwork — it is the foundation the court builds a fair division on.

This post explains the Preliminary Declaration of Disclosure (PDOD) in a California divorce: what forms it includes, why California requires it, what a good PDOD looks like, and what happens when a spouse hides an asset.

Why California requires disclosure

The California Legislature codified fiduciary duties between spouses in Family Code section 721. Spouses have the highest good-faith duty to each other in their financial dealings, on par with a business partner's duty to another partner. That duty extends into the divorce process. Family Code section 2100 declares the state's policy: the divorcing parties are required to fully and accurately disclose the identity and value of all assets and debts, and to update those disclosures as circumstances change.

The mechanism the Family Code uses to enforce that duty is the disclosure regime in sections 2100 through 2113: a Preliminary Declaration of Disclosure early in the case, a Final Declaration of Disclosure before judgment (with limited waivability), and remedies (up to set-aside of the judgment) if the disclosure obligation is violated.

The forms that make up a PDOD

The Preliminary Declaration of Disclosure is a package of four Judicial Council forms:

• FL-140 — Declaration of Disclosure. The cover form. It confirms that the party has served the other required disclosure documents.
• FL-142 — Schedule of Assets and Debts (or, in some cases, FL-160 Property Declaration). A comprehensive itemization of every asset and every debt the party knows about, including retirement accounts, real estate, bank accounts, brokerage accounts, business interests, vehicles, jewelry, and credit-card balances.
• FL-150 — Income and Expense Declaration. Detailed income for the past twelve months, current monthly income and expenses, and information about assets. FL-150 is also the form used for support calculations.
• The tax returns for the two years preceding the disclosure — complete returns with all schedules and attachments, not just the summary pages.

All four elements are served on the other party (or their attorney) and the FL-140 is filed with the court to document that service occurred. The FL-142 and FL-150 themselves are typically not filed — they are exchanged between the parties.

What a well-prepared FL-142 looks like

An FL-142 is not filled in from memory. It is filled in with documents. For a straightforward case, that means recent statements for every bank account, brokerage account, retirement account, and credit card, plus a recent mortgage statement, vehicle titles or DMV registration, and life-insurance and health-insurance declaration pages.

For a higher-asset case, the FL-142 gets more work: business valuations (or at least business tax returns for the last few years and current profit-and-loss statements), appraisals of real estate, statements for stock plans (RSUs, ISOs, ESPPs), and documentation of any separate-property claims (pre-marital account balances traced forward, gift or inheritance documents).

What a well-prepared FL-150 looks like

The FL-150 is the income and expense declaration. For a W-2 employee, the income section is anchored by pay stubs and the most recent W-2. For a self-employed party, the income section is a considerably more substantial drafting exercise — business gross income, deductible business expenses, and personal (non-deductible) draws all have to be broken out clearly.

The expense section on the FL-150 has to reflect actual monthly cash flow. Inflated expenses hurt credibility; deflated expenses can undercut a support claim. Well-prepared FL-150 expenses come from three months of bank and credit card statements analyzed carefully.

Timing

The petitioner is supposed to serve the Preliminary Declaration of Disclosure within 60 days of filing the Petition. The respondent is supposed to serve within 60 days of filing the Response. In practice, the deadlines are often missed by both sides — the case moves at the pace of the case — but the earlier the PDOD gets served, the sooner both parties know what the picture actually is, and the sooner meaningful settlement conversations become possible.

The Final Declaration of Disclosure

California also requires a Final Declaration of Disclosure before entry of judgment (Family Code section 2105). The final version updates the PDOD to current information and confirms nothing has been left off. The parties can mutually waive the Final Declaration by executing a written waiver on Judicial Council form FL-144, which is common in cases where the PDOD is recent and both sides are comfortable it is complete. Waiver requires both sides to sign; it cannot be unilateral.

What happens if a spouse hides an asset

The remedy for a failed or fraudulent disclosure is significant. Family Code section 2107 authorizes the court to impose monetary sanctions and attorney's fees for a party's failure to comply with disclosure obligations. Family Code section 1101 governs breaches of the fiduciary duty between spouses and, in the case of a fraudulent breach, permits the court to award 100% of the value of the undisclosed asset to the injured spouse.

The California Supreme Court's decision in Marriage of Rossi is the classic example: a wife who won a $1.3 million lottery jackpot and concealed it during the divorce lost the entire jackpot to her ex-husband under section 1101. The section is a real deterrent.

Set-aside after judgment

Family Code section 2122 permits the court to set aside a judgment in specific circumstances, including fraud, perjury, and failure to comply with the disclosure requirements of Chapter 9. Discovery of a hidden asset after judgment is a significant post- judgment matter that can, in the right case, reopen the property division. The time limits for a set-aside vary depending on which ground applies, so timing matters.

Ready to talk it through

The Preliminary Declaration of Disclosure is one of the most important documents in a California divorce, and it is worth doing right. If you want to talk through what your PDOD should look like, you can reach me at (619) 250-2683 or through the contact form. See also the divorce practice area and community property post.