CALIFORNIA -- A 2007 appellate divorce case has brought recent light to the subject of full financial disclosure in .
In In re Marriage of Feldman, a businessman did not disclose certainassets and financial transactions to his wife, although she repeatedlyrequested the information. Among the information Feldman wouldn'treveal was the formation of several new companies. Mrs. Feldman hadlearned about her husband's undisclosed assets before the divorce trialand provided her own investigation into the discovery.

Feldman claimed that his lack of disclosure was not intentional andthat the secret assets were of small value compared to the whole of theestate. However, the California Court of Appeals rejected thesearguments, stating that a divorcing spouse has a duty to discloseeverything, which is mandatory until all assets are divided, and thatsuch refusal to do so is not acceptable. According to the Court,Feldman was obliged to disclose all material information in writing,continue to supplement the discovery, and disclose material info beforeany new project began.

In the end, even though the hidden assets and transactions had noteconomically damaged Mrs. Feldman in any way, the trial court decidedthat Feldman should pay his wife $250,000 in sanctions for his failureto comply with the requested disclosure -- as well as another $140,000in her attorney fees. The court ordered the sanctions under thesections of the Code related to fiduciary duty.

The moral seems to be that hiding important financial information fromyour spouse is never a good idea. The consequences of doing so, such asthe results of the Feldman case, could be far more costly than simplyagreeing to a fair property division.

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