BILL ANALYSIS Ó
AB 1406
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Date of Hearing: April 12, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 1406 (Judiciary Committee) - As Introduced: March 7, 2011
PROPOSED CONSENT (As Proposed to be Amended)
SUBJECT : DiSSOLUTION: DISCLOSURE
KEY ISSUE : IN ORDER TO PREVENT UNNECESSARY DELAY AND LITIGATION
EXPENSE, SHOULD THERE BE A DEADLINE BY WHEN PARTIES TO A
DISSOLUTION PROCEEDING MUST SERVE THE REQUIRED PRELIMINARY
FINANCIAL DISCLOSURE DOCUMENTS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
As part of divorce proceedings, the parties must serve each
other with preliminary and final disclosure declarations listing
their assets and liabilities. Additionally, no final judgment
as to property rights may be entered unless the parties have
served the required declarations on each other, or they have
stipulated to a mutual waiver of the final disclosure
declaration. Despite these clear requirements, some parties
still try to hide their assets and delay the proceedings by
failing to serve their disclosure declarations or failing to
provide accurate information.
This non-controversial Committee bill is based on
recommendations of the Judicial Council's Elkins Family Law Task
Force (Task Force), which was charged with helping to ensure
justice, fairness and due process for all family law litigants
and their children. The Task Force unanimously adopted over 100
recommendations, including that the disclosure documents include
tax returns and that the preliminary disclosure declaration be
served by the petitioner within 60 days of filing of the
petition and by the respondent within 60 days of filing of the
response. This bill seeks to codify those recommendations in
statute. There is no known opposition to this bill.
SUMMARY : Provides a specified timeframe for serving mandatory
disclosure declarations in a dissolution proceeding.
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Specifically, this bill :
1)Requires that preliminary disclosure declarations include all
tax returns filed by the declarant within the two years prior
to the date that the declarant serves the declaration.
2)Requires the petitioner to serve the other party with the
preliminary declaration of disclosure either concurrently with
the petition for dissolution, or within 60 days of filing the
petition. Requires the respondent to serve the other party
with the preliminary declaration of disclosure either
concurrently with the response to the petition, or within 60
days of filing the response. Allows the time periods to be
extended by written agreement of the parties or by court
order.
EXISTING LAW :
1)In order to ensure full and accurate disclosure of all assets
and liabilities, requires parties to a dissolution or legal
separation to serve the other party with a preliminary and
final disclosure declaration, except as specified. Requires
the preliminary disclosure declaration to be served after or
concurrently with service of the petition for dissolution or
separation. (Family Code Sections 2103-04. Unless stated
otherwise, all further references are to this code.)
2)Except as provided, prohibits the court from entering a
judgment regarding the parties' property rights in a
dissolution unless each party, or their attorney, has executed
and served a final disclosure declaration and a current income
and expense declaration. (Section 2106.)
3)Provides that if a party to a dissolution or legal separation
fails to serve the other party with a preliminary or final
disclosure declaration, and the other party has served the
respective declaration, that other party may, in addition to
other remedies, file a motion showing good cause for the court
to grant that party's voluntary waiver of receipt of the
disclosure declaration. If a court grants a party's request
for voluntary waiver of receipt of a disclosure declaration,
provides that the court may set aside the judgment entered
after the waiver for failure to comply with the disclosure
requirements only at the request of the party who complied
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with the disclosure requirements. (Section 2107.)
4)Requires each spouse to act with respect to the other spouse
in the management and control of the community assets and
liabilities in accordance with the general rules governing
fiduciary relationships, until such time as the assets and
liabilities have been divided by the parties or by a court.
Includes the obligation to make full disclosure to the other
spouse of all material facts and information regarding the
existence, characterization, and valuation of all assets in
which the community has or may have an interest and debts for
which the community is or may be liable, and to provide equal
access to all information, records, and books that pertain to
the value and character of those assets and debts, upon
request. (Section 1100(e).)
COMMENTS : Currently, parties to a dissolution or nullity of
marriage or legal separation must serve each other with a
preliminary disclosure declaration listing the parties' assets
and liabilities, and the percentage of ownership in each item
not solely owned by one or the other party. Additionally,
unless the judgment is by default, no final judgment as to
property rights may be entered unless the parties have served
the required declarations on the other party, or they have
stipulated to a mutual waiver of a final disclosure declaration,
having previously exchanged preliminary disclosure declarations.
In case of a default judgment, only the petitioner's
declaration of service of the preliminary disclosure is
required.
Despite these clear requirements, some parties still try to hide
their assets and delay the proceedings by failing to serve their
disclosure declarations. This non-controversial Committee bill
is based on recommendations of the Elkins Family Law Task Force.
The Task Force unanimously adopted over 100 recommendations,
including that the disclosure documents include tax returns from
the last two years and that the preliminary disclosure
declaration be served by the petitioner within 60 days of filing
of the petition and by the respondent within 60 days of filing
of the response. This bill seeks to codify those
recommendations in statute.
This bill is consistent with existing law, which requires
spouses, until assets and liabilities have been divided, to make
full disclosure to each other of all information on all assets
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in which the community may have an interest and all debts for
which the community may be liable, and to provide access to all
information, records, and books that pertain to the value and
character of those assets and debts. It is also consistent with
the existing the Judicial Council Income and Expense
Declaration, which requires copies of federal tax returns to be
attached.
Proposed Amendment : It is possible that, in a particular case,
the parties agree to postpone the exchange of disclosure
declarations or the court determines that such a delay is
warranted. For example, the parties may be working on
reconciling and may not need to share disclosure declarations at
that time. The Committee rightly proposes to amend the bill to
allow for such delays. The proposed amendment is as follows:
On page 3, line 8, after "." insert: The time periods in this
subdivision may be extended by written agreement of the parties
or by court order.
Previous Legislation : AB 459 (Lowenthal), Chap. 110, Stats.
2009, provides that if a party to a dissolution or legal
separation fails to serve the other party with a preliminary or
final disclosure declaration, and the other party has served the
respective declaration, that other party may file a motion
showing good cause for the court to grant the party's voluntary
waiver of receipt of the disclosure declaration.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of Certified Family Law Specialists
Family Law Section of the State Bar
Judicial Council
Opposition
None on file
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
AB 1406
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