Trusts & Estates
Joe Paterno’s Wife Bought Their Home for $1; Was It Estate Planning or Asset Shielding?
Posted Nov 16, 2011 9:09 AM CDT
By Debra Cassens Weiss
Updated: Pennsylvania court documents indicate that former Penn State football coach Joe Paterno transferred the family home to his wife, Sue, in July for the low price of $1.
Sue Paterno also agreed to pay with “love and affection” when she became trustee of the home they once owned together, the New York Times reports. Its fair market value is listed at nearly $600,000.
A lawyer for Paterno, Wick Sollers, told the Times that the home was transferred as part of a “multiyear estate planning program” and had nothing to do with sexual abuse charges against former assistant football coach Jerry Sandusky.
Was the transfer possibly an effort to shield Paterno’s assets in the event of civil suits? Lawyers speculated in a previous New York Times article that several Penn State officials could face lawsuits claiming they ignored warnings about Sandusky. Whether Paterno could face liability would depend on what he knew about the allegations.
Paterno has previously testified he was told that Sandusky was caught doing something of a sexual nature with a boy. He reported the incident to others at the university, but did not go to police, according to past reports.
Experts interviewed by the Times for the article on the property transfer said it’s difficult to determine the reason for the transfer based on the public documents.
University of Pittsburgh law professor Lawrence Frolik told the Times he can’t see any tax advantages for such a transfer. “My reaction would be, ‘Are they hoping to shield assets in case if there’s personal liability?’ ” he said.
A later article by the New York Times Bucks blog suggests the transfer may have been an attempt to equalize what each spouse owns for estate tax purposes. The idea is to take full advantage of the estate tax exemption for each spouse—currently $5 million a person—so the couple's heirs get a $10 million exemption.
Updated on Nov. 17 to include information from Bucks blog.