The Importance of Disclosing Your Finances in a Divorce or Legal Separation
When Amazon CEO & founder Jeff Bezos and his wife MacKenzie Bezos announced their divorce after 25 years of marriage, it was reported Jeff was worth approximately $137 billion. In April 2020, news outlets stated a divorce settlement in which MacKenzie received 25% of Jeff Bezos’ stake in Amazon. The former Mrs. Bezos is expected to be worth about $38 billion and will vault her to the third richest woman in the world according to Forbes’ list. The Bezos marriage was dissolved in the State of Washington.
Assuming this case was in California, how would MacKenzie Bezos find out Jeff Bezos’ true net worth? California Family Code Section 2104 provides that the petitioner who files for dissolution of marriage shall serve the other party a preliminary declaration of disclosure either concurrently with the petition for dissolution or legal separation, or within 60 days of the filing the petition. If the petitioner serves the summons and petition by publication or posting pursuant to a court order, and the respondent files a response before default judgment has been entered, the petitioner shall serve the other party the preliminary declaration of disclosure within 30 days of the response being filed. The respondent shall serve the other party with a preliminary declaration of disclosure either concurrently with the response of the petition, or within 60 days of filing a response. The time period may be extended by written agreement of the parties or court order.
What is a preliminary declaration of disclosure? It’s a document where each party executes under the penalty of perjury listing all the assets and liabilities the declarant has or may have regardless of the characterization of the asset or liability as community property, quasi-community property, or separate property. The commission of perjury on a preliminary declaration of disclosure may be grounds for setting aside the judgment in addition to remedies, civil and criminal, that are available under law for commission of perjury.
The assets may include real property; household furnishings and appliances; jewelry, antiques, art, coin collections; vehicles, boats, trailers; savings and checking accounts; credit union and other deposit accounts; cash; tax refund; life insurance with cash insurance or loan values; stocks, bonds, secured notes, mutual funds; retirements and pensions; profit-sharing, annuities, IRAS, deferred compensation; accounts receivables and unsecured notes; partnerships and other business interests. The liabilities may include student loans; taxes; support arrearages; unsecured loans; credit card debts, and other debts.
Along with the preliminary declaration of disclosure, each party is required to provide the other party a completed income and expense declaration, and all tax returns filed by each party within the two years prior to the date the party served the declaration.
California Family Code Section 2105 provides that before or at the time the parties enter into an agreement for resolution of the property or support issues or if the case goes to trial, each party is required to serve on the other party a final declaration of disclosure along with a current income and expense declaration unless the parties mutually waive the final declaration of disclosure. The commission of perjury on the final declaration of disclosure may be grounds for setting aside the judgment in addition to remedies, civil and criminal, that are available under law for commission of perjury.
Preparing a complete schedule of assets and debts and the income and expense declaration is very time consuming. It will require gathering credit card and bank statements, deeds to houses and titles to cars, and determining what is community, quasi-community, and separate property. We will guide you through the process and fight for your rights in family law court.
About the Author: Dennis Chin practices civil litigation with an emphasis on civil and commercial litigation, real estate and family law. He represents parties in all phases of litigation including discovery, law and motion, deposition, arbitration, mediation, negotiation and settlement, and trial. Prior to joining SAC Attorneys LLP, Mr. Chin had his own practice and was a litigation attorney at Burnham Brown, one of Oakland’s largest law firms.