Joe Paterno's Real Estate Transfer: Suspicious or Not?
Why would former Penn State football coach Joe Paterno transfer ownership of his house, worth $594,484, to his wife for $1 in July, unless he knew that he was about to be drawn into the college's sex-abuse scandal, with potential civil lawsuits and damages heading upfield toward him?
While his lawyer told The New York Times that the ownership transfer was nothing more than a step in a long-term financial estate plan, the move raised some eyebrows. Was the sale an attempt by Paterno to shield assets, fearing that some jury down the road might take him to the cleaners? And by transferring his home to his wife, Sue Paterno, did the coach who once walked on water just sink deeper into the dark hole of public scorn?
AOL Real Estate spoke to several estate lawyers and heard pretty much the same thing: Joe Pa probably didn't do anything fishy, at least when it came to giving his wife the house for $1 plus "love and affection." The couple (pictured at left) had previously held joint ownership of the property, for which they paid $58,000 in 1969.
David Shulman, an attorney in Fort Lauderdale, Fla., whose practice focuses on trusts and estates, says there's no obvious reason to link the home transfer with an attempt to protect assets or do an end-run around prospective creditors. In Pennsylvania, Shulman noted, as long as the property is held jointly -- as Paterno's was -- it can't be subject to the creditors of just one of the spouses. And since Sue Paterno hasn't been linked at all to the sex-abuse scandal, she has no liability or exposure.
"I haven't seen the documents," Shulman said, "but from what's been made public, it just doesn't make any sense that this was an attempt to protect assets."
Then what was Paterno up to? Shulman said the 84-year-old Paterno's decision to transfer the house more likely had something to do with age-related issues, such as Medicaid and tax planning. To qualify for Medicaid-covered nursing home care, for example, a recipient must "spend down" to a certain level. And people are constantly looking to protect their assets from taxes to ensure that their heirs inherit as much as possible.
Since Paterno has good insurance and a degree of wealth, he probably didn't do it for Medicaid purposes. Far more likely it was done as an estate planning move to avoid probate, said Shulman. "It is a fairly typical thing for people of means to want to protect their assets for their children or whoever will inherit them," he said.
Paterno, who was fired as the football coach at Penn State, has been harshly criticized by many for not taking more aggressive steps after a suspected sexual assault of a child by one of his former top assistants was reported to him. And if the reaction to the house transfer is any indication, it's a safe bet that the burgeoning scandal will cast suspicion on everything else the coach does.
[Correction: An earlier version of this post incorrectly referred to Paterno as Joe Pop; his nickname is Joe Pa.]
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