As a divorce mediator, I have couples come in from time to time that have already come to an agreement prior to engaging in the mediation process. Often times, these couples have met together, reviewed their assets, debts, incomes and expenses, and done their best to create an agreement between them that is fair. When this happens, the couple will come to mediation for our Simple Solution. As part of any of our out of court settlement processes, our office always requires that both parties complete the Preliminary Declaration of Disclosure (“PDD”). This consists of a Schedule of Assets and Debts (FL-142) and an Income and Expense Declaration (FL-150). However, when the couples have already come to an agreement, they often ask if it is necessary for them to fill these forms out. Even though we can appreciate that these forms can be an inconvenience, we still require that the couple complete them. There is a few reasons for this:
1. The California Family Code requires that the parties disclose their assets and debts.
The courts in California are backlogged at this time. Therefore, they are certainly in favor of out of court settlement processes such as mediation. However, the courts still have an interest in protecting people. California Family Code Section 2100 states that full disclosure of all assets and debts, whether separate or community, must be made before the parties can enter into an agreement. This is because the court wants the people involved in the divorce process to be sure that they know the nature and extent of property, debt, income and expenses before they make an agreement regarding these things. Essentially, it is a safeguard that is built into our system.
Are you worried about your finances becoming public record? If so, rest assured that divorce mediation is the right route for you. In divorce mediation, instead of filing your Schedule of Assets and Debts (FL-142) and Income and Expense Declaration (FL-150) with the court, our office prepares a declaration that gets filed at the end of your divorce mediation process. This form states that you and your spouse filled out the disclosure forms, so that the actual forms do not have to become public record.
2. You must complete your disclosure or your Agreement could be set aside.
The goal of every divorce mediator is to assist the parties in creating an Agreement that they both feel is fair and of course, is enforceable in court if need be. This is another reason why financial disclosure is so important. California Family Code Section 2107(d) states that a judge may set an Agreement aside if full financial disclosure has not been made. At Alternative Divorce Solutions, we encourage people to work together to create fair Agreements on their own when this is appropriate. However, even in these cases, we still require disclosure. We recognize that it takes a lot of work to negotiate all of the financial issues in your divorce. You don’t want that hard work to go to waste when your Agreement is found to be unenforceable later on.
3. It creates a sense of peace.
Divorce can be a very disempowering time in your life. Often times, when couples start the divorce mediation process, they are sitting down to discuss their finances for the first time. Although we do everything we can to help the couple feel calm during the process, there is simply a lot of new information that they will have to absorb. Some people say that it’s like fumbling around in the dark at first. In my opinion, the fastest way to ease a couple’s anxiety is to have a productive conversation about the finances. At the very first mediation appointment with Alternative Divorce Solutions, the couple will sit down and review the financial disclosures they each have made with the assistance of their divorce mediator. Our office is very strict about ensuring that those forms are completed prior to the first mediation, as full disclosure is so crucial to a successful divorce mediation.
To assist the couple in completing these forms, our staff will explain them at full detail at the initial consultation appointment. We go through the forms line-by-line with the couple, explaining what information needs to be filled out, and what proof needs to be attached to each form. Often times, the couple will need to spend a week or two gathering mortgage statements, bank statements, credit card statements, pay stubs, and other documents that will be required of them. To further assist the clients in this process, our office provides a detailed instructional packet that outlines exactly how to complete the forms and what attachments are needed. The financial disclosure process can be very positive for the couple, as it is an exercise in team work and cooperation that must be done prior to starting the mediation process.
4. It fosters cooperation.
Divorce mediation is a process that requires the good faith efforts of both spouses. Each person’s willingness to be transparent and put the work into completing the financial disclosures is an example of their desire to come to a fair Agreement. Sometimes, if one or both spouses have been in the dark about each other’s finances, the assurance that the disclosure process will take place removes some of the tension. Finally, the willingness of the spouses to make that disclosure shows that they are ready to be open, honest, and transparent. These are necessary components to a successful divorce mediation.
5. It empowers people to make sound decisions.
I am sure we have all heard the saying “information is power.” We have really found this to be true. Think about the last time you made an important decision, like buying a car. You would want to know how much the car costs, what your monthly payments will be, what year the car is, and probably a lot more. Divorce is the same as any other big decision. Once all of the information is provided in a productive and respectful manner, people are able to weigh their choices. In addition, if one spouse has not been a part of the finances of the couple during the marriage, it is empowering for him/her to have this information for the first time.
At Alternative Divorce Solutions, we work alongside you to ensure that your disclosures are completed. We do our part to help you create an Agreement you feel is fair, and that will be enforceable down the road if need be.