In this season of spring cleaning, the LA County Courts have introduced two procedural changes to expedite enforcement of existing rules and empower parties throughout the divorce process. Here, we discuss what these changes may mean for clients navigating divorces.
UPDATE #1: Orders to Share Financial Information
As discussed in earlier editions of As It Happens, spouses have a fiduciary duty to provide complete and accurate information regarding any transaction involving their community property upon request. This duty applies both during marriage and divorce - in California, spouses must disclose all separate and community income, expenses, assets, and debts within 60 days of service of their Petition or Response, and are required to continually update this information while the proceedings are pending. Failure to do so can lead to a variety of penalties and sanctions, including forfeiture of some or all of the undisclosed asset(s), and payment of the non-breaching party’s attorney’s fees. Full and timely disclosure of the totality of a party’s financial picture is crucial in determining whether and in what amount the parties will owe support and/or attorney’s fees, and the need for/extent of the discovery required.
Consider the example of Jane and Tom, who have been married for 21 years, and share two minor children. Jane - who was the sole earner in the marriage and exclusively controlled the parties’ finances - files for divorce from Tom. Within days of filing, Jane cuts off Tom’s access to all their shared accounts.
In order to have an accurate understanding of the assets available to him for spousal support, child support, and attorney’s fees, Tom will need to see Jane’s Income and Expense Declaration. Additionally, while Tom knows Jane owned multiple companies and had a large, diversified investment portfolio, he doesn’t have any details about the amount and locations of their community assets. In order to determine the amount of discovery his attorneys have to do, and whether he needs to hire any experts, a forensic accountant for example or a business or real estate appraiser, Tom will need to see Jane’s disclosures. A review of the disclosures will help Tom and his legal team understand what Jane claims their community or their separate estates consist of.
Before mid-May 2018, if Jane failed to meet her 60-day deadline, Tom would have to first submit his own disclosures, then submit a formal request for Jane’s within a certain period of time. If Jane still refused to submit her financial documents, Tom could file a motion with the Court asking it to order Jane to do so, and further request that she be sanctioned for noncompliance. Starting in May 2018, whenever a petition for divorce, legal separation, or nullity of marriage is filed, the Court will issue an Order to Share Financial Information. If a party doesn’t file their financial disclosures within 60 days of filing either their Petition or Response, this new order empowers the Court to sanction them immediately (note: the money collected from such sanctions is payable to the court, not the opposing party). Not only does this new order save the party requesting disclosures time and effort, it acts as an incentive/motivation for both parties to disclose at the outset.
UPDATE #2: Orders to Share Financial Information
The second modification has to do with Requests for Order, more commonly referred to as “RFO”s. Once a proceeding for divorce, separation, or nullification of marriage has been initiated (i.e. once one party has filed a Petition and the other party has filed a Response), either party may file an RFO to request a formal order from the court that will control some aspect of the parties’ relationship for the duration of the legal proceedings between them.
Under the new rule, whenever the first RFO is filed in a family law matter (with the exception of requests for Domestic Violence Restraining Orders), the Court will issue an Order for the parties to participate i a Family-Centered Case Resolution Conference, and schedule said conference for the same date as the hearing for the RFO. Prior to the conference, the parties or their attorneys will be required to discuss the entire case in detail (including settlement proposals) either in person or over the phone. Then, at the Conference, the Court can attempt to facilitate the