Judge Joan E. Young

Judges Joan Young and Elizabeth Pezzetti are spending their final days on the bench at the Oakland County Family Court. The two senior jurists will retire in January and, in each case, will be sorely missed.

In 1984, this blogger spent the summer as a legal intern in Joan Young's office. Back then, she was the court administrator for the Oakland County Circuit Court; long before there was a family court division.

A Wayne State Law graduate, Judge Young was first elected to the Oakland County Probate Court in 1988; she was later appointed by Governor Engler to the circuit bench in 1997, where she was elected to three consecutive 6-year terms.

When the Michigan Legislature created the county family courts in 2000, Judge Young served as chief judge of the circuit court and was instrumental in creating the family law division within the Oakland Circuit. Also, Judge Young presided over the adult drug treatment court from its inception in 2002 until just last year.

In 2002, when the circuit court announced the implementation of e-filing and a push toward a paperless electronic court filing system, Judge Young was the one making the announcement. She provided very strong leadership in these key service areas of the court.

Judge Pezzetti (R) with Referee Betty Lowenthal

For her part, Judge Elizabeth Pezzetti also was appointed by Governor Engler, in 2001, to the probate court. Like Judge Young, Judge Pezzetti spent the her tenure on the bench at the dawn of the family court and during the transition to an electronic filing system.

This blogger has had the distinct pleasure to serve along with Judge Pezzetti on the Citizens Alliance Committee, the advisory board for the circuit and probate courts of Oakland County.

Judge Pezzetti has always had a probate component to her docket; even when serving as a family court judge. As such, she is accustomed to resolving disputes involving families that are under great stress, or families that have members at odds with one another.

The principle manner in which Judge Pezzetti has served our local court over the past 16-years has been through her consistent, patient and studied approach to the many many cases that have flowed through her courtroom. Like Judge Young, she will be very difficult to replace.

In Michigan, judges are elected thus, both seats will be filled by the winner of the non-partisan election on November 8th. Don't forget the non-partisan ballot; it is on the back side of the partisan ballot, so be sure to flip your ballot over to vote for judges.

The candidates running for Judge Young's open seat are Oakland County Friend of the Court Referee Lorie Savin and West Bloomfield attorney Victoria Valentine. The candidates running for Judge Pezzetti's open seat are Clarkston lawyer and Public Administrator Jennifer Callaghan and Collin Einhorn lawyer Karen Geibel.

Post #564
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In mid 2008, many divorce attorneys faced the problem of apportioning sudden significant losses in the stock and real estate markets.  Those cases depended on valuing IRAs and 401(k) plans to neutralize the risk for both parties.

The economy fell too fast and too far, however, for many sagging marriages.  During the first two quarters of 2008, many divorce litigants locked-in on values established over appreciable time.  Unless their divorce attorneys had the qualified domestic relations order (QDRO) ready at the trial date (a rare bit of forethought), significant value was lost each day of the delay.  In some cases, more than six-figures.

One such case decided during that era by Oakland County Family Court Judge Elizabeth Pezzetti, Skinner v Skinner, was upheld earlier this month in an opinion by the Michigan Court of Appeals.

Skinner is a guide for divorcing partners relative to what constitutes premarital or "separate" retirement property and defines "passsive income" relative to retirement assets.  The case also illustrates the consequences of stipulating to division dates for retirement assets, then suffering a long delay prior to full-resolution of the divorce litigation.

In Skinner, Husband stipulated to a date for purposes of valuation of the couple's retirement assets, including the pre-marital portion of his 401(k).  A two or three day trial and other dispositive court hearings were then spread over the next 3-months, during which time investment portfolios tanked, eroding nearly half the accrued value in retirement assets, across the board.

The issues in the case were: how to classify the significant interest income generated from Husband's pre-marital, and thus separate, retirement asset; and what date to use for division of the parties' IRA.

Coming into the marriage, Husband had invested approximately $15,000 in his Ford Motor Company 401(k) plan.  Over the course of the couple's 23-year marriage, more than $150,000 in marital earning contributions were made to the Ford plan.

As of the (pre-Great Recession) trial date, the value of the parties' other significant retirement asset, an IRA, was nearly $500,000.  By the time the judgment of divorce entered in mid-November, the IRA was only worth $330,000, and the Great Recession was upon us.

At trial, Husband presented a mathematically sound formula to calculate the interest generated from his pre-marital investment; these calculations were uncontested.  In her opinion dividing the marital estate, however, Judge Pezzetti ruled that 100% of the appreciation on the retirement plan was part of the marital estate.

The court of appeals affirmed Pezzetti's decision, including such gains as a component of the marital estate when a spouse, in this case the Wife, assists in the growth of the separate asset.  In the Skinner case, this assistance took the form of Wife's role as homemaker for the parents' four children.

Husband in Skinner took a double hit due to the losses incurred from the stipulated valuation date and the delay in getting the divorce judgment entered.  He cried "unfair" to the appellate court, to no avail.

In many of these cases, investor(s) nearing traditional retirement age were caught napping; some had a significant portion of their life-savings  invested in stock-based retirement assets rather than a more liquid, diversified portfolio.  Once the Great Recession took hold of the economy, divorce attorneys whose clients had already agreed to valuation dates for retirement assets lost significant value each and every day until their final judgment was entered.

Even when (painfully) aware of the issue, attorneys simply could not complete these divorces fast enough.  One of the parties, like in Skinner, usually came up short, suffering a complete loss of retirement value.

Once an agreement is reached, or when a divorce trial begins, it is crucial for the attorneys to work diligently in order to complete the often painful and emotional process of ending a long-term marriage.  Skinner tells us that no good can come from a delay.

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