Funk music innovator, George Clinton, and his wife of 23 years, Stephanie Clinton, are now amidst a battle over spousal support. TMZ reports that Stephanie is now seeking Clinton pay up and is requesting the court to order both temporary and permanent spousal support. Clinton is reportedly not too pleased about this request because he had previously claimed that the couple had been separated for many years and they didn’t have any shared bank accounts or real estate. However, Stephanie is requesting that the court make Clinton disclose all of his finances, including taxes, bank accounts, etc. Stephanie wants to know exactly how much spousal support she is entitled to after their 23 years of marriage. The question remains, to what extent does Clinton really have to disclose?
As divorce attorneys know, declarations of disclosure are essentially the backbone of a divorce case. In California, Preliminary declarations of disclosure are mandatory. Final Declarations of disclosure, on the other hand, may be waived by both parties. With regards to disclosure, California Family Code Section 2100(c) requires complete disclosure of all assets and all debts that the parties may have any interest in. The disclosure must occur early in the divorce or legal separation process, and must occur together with a disclosure of all income and expenses.
Read more about fiduciary duty and divorce in California
Types of Disclosure:
Such disclosure requires preparation of the following documents by divorce attorneys:
- Schedule of Assets and Debts;
- Income and Expense Declaration;
- Statement of material facts regarding valuation of all community property assets;
- Statement of material facts regarding obligations that the community is liable for; and
- Disclosure of any investment opportunity, business opportunity or other income-producing opportunity.
While these forms may seem fairly simple and straightforward, it is very important that divorce attorneys advise their clients to be extremely open and comply with the full disclosure requirement. This means that that ALL liabilities and ALL assets must be accurately disclosed. This often requires the client to spend a lot of time thumbing through old files of financial statements to find the most recent balances and accurate information. It is also vital that divorce attorneys remind their clients that the disclosure requirement applies to assets and liabilities that the client may have in the future, such as potential business opportunities that the client is aware of. Even though the client may think that an asset or debt is a separate property item, it must still be disclosed in accordance with California Family Code Section 2100.
Failure to Disclose = Sanctions?!
Failure to comply with disclosure requirements can result in significant sanctions, so clients should think twice about leaving out an asset or two. For instance, in In re Marriage of Feldman (2007), 153 Cal. App.4th 1470, the Husband failed to disclose numerous transactions and the formation of new companies, which were all quite significant. Wife found out about these assets by other means and filed for sanctions pursuant to California Family Code Sections 1101(g), 2107(c) and 271(a). The court held that husband could be sanctioned, and as a result Wife was granted $250,000 in sanctions! The court reasoned that Husband had an obligation to fully disclose all material facts and information regarding all assets in which the community has or may have had an interest.
So, despite his reluctance, it looks like Clinton is going to have to fork over some financial paperwork so that a fair determination can be made regarding how much spousal support Stephanie is entitled to. If he fails to do so, looks like some pretty hefty sanctions may be in his future.
Please contact us if you are considering a divorce from your spouse and want assistance accurately preparing your declarations of disclosure. Nancy J. Bickford is the only attorney in San Diego County representing clients in divorces, who is a Certified Family Law Specialist and who is actively licensed as a Certified Public Accountant (CPA). Call 858-793-8884 to receive assistance today and avoid significant sanctions.