Joe Paterno: Is $1 Estate Sale a Tax Shelter or Estate Planning?

The Joe Paterno saga keeps adding wrinkles to it thanks to his alleged involvement in the Jerry Sandusky case. The former Penn State head coach is making news today because of reports that he made a deal with his wife to sell his share of their house for $1 in July.

According to a report from Mark Viera and Pete Thamel in the New York Times, the sale was part of an estate planning program for the couple. 

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Documents filed in Centre County, Pa., show that on July 21, Paterno’s house near campus was turned over to “Suzanne P. Paterno, trustee” for a dollar plus “love and affection.” The couple had previously held joint ownership of the house, which they bought in 1969 for $58,000.

According to documents filed with the county, the house’s fair-market value was listed at $594,484.40. Wick Sollers, a lawyer for Paterno, said in an e-mail that the Paternos had been engaged in a “multiyear estate planning program,” and the transfer “was simply one element of that plan.” He said it had nothing to do with the scandal.

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The timing of the sale, as well as the sale itself, have led some to speculate that this whole thing is a way to protect the Paterno house in the event that some or all of the alleged victims in the Sandusky case file civil lawsuits against Paterno. 

If civil lawsuits are filed—and Paterno is forced to pay—he could lose a majority of his assets, including the house. The timing of this sale is making some people stop and say "wait a minute..."

For me, the whole thing sounds too convenient to be a master plan by Paterno and his wife, Sue, to protect their house. 

That same New York Times article also states that the house has been "the subject of years of complex and confusing transactions."

Two different lawyers that were interviewed for the article had two vastly different responses to the documents available. 

One said that it "appeared to be an explicit effort to financially shield Joe Paterno." The other lawyer said that it was "benign."

Any outrage or speculation about protecting themselves at this point, considering the information available, seems to be without merit. 

Not to sound too morbid, but Paterno is 84 years old and in the final years of his life. This sounds like his way of just getting his affairs in order in case something happens to him than trying to protect himself from anything.