“It sounds like an attempt to avoid personal liability in having assets in his wife’s name.”

In poker terms, we call this a tell.

Joe Paterno transferred full ownership of his house to his wife, Sue, for $1 in July, less than four months before a sexual abuse scandal engulfed his Penn State football program and the university.

The county lists the fair market value of the property at nearly $600,000.

And if you think an 84-year old Paterno suddenly discovered the need to do some elaborate estate planning, I’ve still got that beachfront property in Hahira available.  Give me a call.

About these ads

82 Comments

Filed under Big Ten Football, Crime and Punishment

82 responses to ““It sounds like an attempt to avoid personal liability in having assets in his wife’s name.”

  1. That just makes him look even worse. Sure he knew nothing.

    • The Lone Stranger

      The old man knew plenty — you’re right on about that.

      • Mayor of Dawgtown

        I don’t think that legally the transfer to his wife can be set aside, though. There was no judgment against Paterno nor was a lawsuit filed at the time of the transfer. The media firestorm hadn’t even happened. Not enough circumstantial evidence for a court to find a fraudulent conveyance.

        • Cojones

          What about local publication of this affair in April? A “head’s up”?

        • Keese

          Damn you beat me too the fraudulent conveyance part. Agree, would never hold tho. The real question is what about other assets. I really doubt JP at 84 y.o. has exposed assets (no pun lol)

          • If nothing else, he’s qualified for a big pension upon retirement.

            • Mayor of Dawgtown

              No doubt the guy is solvent. Two big questions: (1) Is there any insurance coverage for this if he gets sued? (2) Will Penn State provide a legal defense to him and /or cover any judgments against him?

              • Good questions, to which we’ll learn answers at some point in time.

                One thing they won’t be able to assert in their defense is sovereign immunity, as Penn State is not a state school as such is defined under Pennsylvania law.

            • Keese

              Help me here. Is the only thing questionable with timing a ~$600k home? That’s chip change for JP and not the most solvent asset for any suit or judgement against him. I’m not defending JP, just not ready to look at as quesionable conveyance. Not this single act

              • That’s chip change for JP and not the most solvent asset for any suit or judgement against him.

                If he owns it free and clear, it’s certainly an asset that a creditor would be more than happy to grab.

                Plus, I think you woefully underestimate the intangibles here. It’s the home they’ve lived in for decades. Most people are going to protect their personal residence from being taken away.

                As I’ve indicated before, I’ve seen this sort of fact pattern many times. And in almost every case, it’s for asset protection. It’s not necessarily illegal, but it’s always an act of self-preservation against pitfalls, potential or otherwise.

  2. BMan

    I’ve also found it odd that the Sandusky arrest came almost immediately after Paterno hit his magical win total, as if the police and courts were going to make sure he hit the number before the house came down. It’s hard to give the benefit of the doubt about anything to anyone involved in this shit-storm.

  3. Spike

    It is going to get worse. Bet on it.

  4. timphd

    Damn. The shit just gets deeper. I guess JoPa just isn’t the guy most thought he was.

  5. Hogbody Spradlin

    Query whether Pennsylvania has a homestead exemption from levy, how strong is its Statute of Elizabeth (conveyances to defeat creditors), and check the dates on Paterno’s last 2 or 3 sets of estate planning documents. Ought to be some good stuff in there.

  6. Guest

    Nothing’s more dangerous than lawyers practicing across state lines.

  7. Dave

    I’m still wondering what really happened to the DA originally investigating the case and the missing hard drive from his laptop…..seems really suspicious!

    • I’m sure a DA has plenty of enemies. Some that are more monstrous in the brutality sense than Sandusky. Sandusky is coward. I’m sure, IF the DA went missing due to foul play, it was at the hands or a more ruthless criminal.

      • Macallanlover

        Think I saw/read that the missing DA was more likely involved with a drugs/organized crime case in the area. Seems to be very little chance his disappearance is linked to the current mess at Penn State. Pedophiles are too gutless for that type of play. Media just throwing feces against the wall, facts do not deter that group of sharks.

  8. Don’t all rich people do that? (Perhaps not timing wise, of course)

  9. HahiraDawg

    We’re neighbors!

  10. Scorpio Jones, III

    Certainly NOT defending Paterno, but, considering his age (84) I would have thought this was a fairly normal thing to do to lower the value of his overall estate and avoid the tax man….something Republicans are taught from birth.

    • Sure, and if it were something he did 25 years ago, nobody would be batting an eye over it.

      • Scott

        Breaking news: Paterno’s wife seen at grocery store. She and Joe are trying to consume all of his assets. Telling :)

        • **chuckle**

          Dude, if you’re all in on JoePa, be my guest.

          Just don’t tell me that it’s normal for a guy like him to doing significant estate planning at age 84. Or that Alex’ concerns couldn’t have already been addressed (and most likely have been addressed) in a competently prepared will.

          I’ve practiced real estate law for more than 30 years. Transactions like the one described in the linked article are overwhelmingly done for one purpose, asset protection. Maybe he’s the exception to the rule, maybe not. But it’s not the absurd coincidence you’ve convinced yourself it is.

          Carry on with the silliness.

          • Scott

            Moving some assets out of fear of potential litigation does not equal an admission or verdict of guilt. So what if his legal/ financial advisers probably gave him some advice and he went along? So what.

            Given the public support of Joe Pa in State College, a wise plaintiff’s lawyer would sue everyone at the University but him. And whatever moral shortcomings you find with his actions, that is different from finding that he breached a legal duty and has personal legal liability. I seriously doubt his home was touchable anyway.

            I said yesterday you guys wouldn’t be happy until he was in prison. And lo and behold, now you want his house.

            • Moving some assets out of fear of potential litigation does not equal an admission or verdict of guilt.

              Who said it did?

              What it does indicate is that JoePa has had a sense of where things were headed for a while.

              I’m unaware of anything he’s done that amounts to criminal behavior and I’m not looking to put him out on the street. But his legacy deserves to be tarnished by what’s happened. And moves like this should contribute to the public’s perception of the man.

              • Scott

                Paterno was first notified/ requested to speak to the grand jury back in April, and Paterno testified in May. According to Forbes, Paterno and PSU were notified of about a grand jury being convened back in January. At least one lawyer (someone named Specter) admits to pursuing a tort claim on behalf of a victim for several months. So yeah, he had a sense of where things were headed for a while.

                I guess where you and I disagree is that I still see this as a single bad decision by Paterno on the morning McQueary came to see him. You see it as a 20 year ongoing cover-up. I am not there yet.

                • How is it a single bad decision when Paterno knew of multiple incidents of molestation, did nothing substantive about it, and every single day that Sandusky kept hanging around was a constant reminder that nothing had been done.

                  • Even if you assume it came down to the single incident (which I doubt), why did JoePa remain silent in the following days when it became clear that the police had not been contacted as state law required?

                    • Scott

                      Do you think he really knew what state law required during that period?

                      Plus, I do not think Paterno was the person charged with that reporting obligation under state law.

                      I think he compartmentalized. He was the football coach, and he brought the matter to the attention of those with more overall responsibility for Athletics, and these officials probably thanked him for the info and told they they would handle it.

                      How was it suppose to become clear to him that the police had not been contacted? I assume you mean that when it became apparent after some months (because these investigations can take months before arrest) that Sandusky had not been arrested, then at that point it should have become clear to Paterno. You do realize that nobody knew the identify of the victim, and to this day I still do not think the kid has ever been identified. Maybe Paterno figured there was no arrest for that reason. Tough to bring charges for crimes against unknown persons. I am speculating, but so are you.

                    • Scott

                      You are wrong about Penn. State Law. It did not require Paterno to report the crime to the police. The law required him to report the suspect abuse to university officials charged with such responsibility: See Section 16.102 which requires a university staff member to:

                      “immediately notify the person in charge of the institution, school, facility or agency or the designated agent of the person in charge when they have reasonable cause to suspect on the basis of their professional or other training or experience, that a child coming before them in their professional or official capacity is a victim of child abuse.” Upon notification… the person in charge or the designated agent shall assume the responsibility and have the legal obligation to report or cause a report to be made in accordance with subsections (a), (c) and (d).

                      this link explains Penn Statute

                      http://www.politicspa.com/after-psu-scandal-lawmakers-push-to-change-mandatory-reporting-requirements-statue-of-limitations/29515/

                      So Joe Pa did exactly what the law dictated that he do. That should change all of your minds I would think.

                    • Read my response carefully, Scott. I didn’t say Paterno had a legal responsibility to report the crime to the police. What I said was that he had a moral obligation to follow up and to take matters into his own hands when it became clear that his superiors weren’t complying with the law’s requirements.

                      You keep worrying about what the law required him to do. I keep wondering what he would have done if that had been his nephew or grandson that Sandusky had abused. I doubt he would have stayed silent. What do you think?

                    • See if you can read this without a reaction.

                  • Scott

                    Paterno knew of multiple incidents of molestation? Source? That would be news to me.

            • Cojones

              He owns a prison too?

    • Anon

      “….something Republicans are taught from birth.”

      You’re an idiot. Stick to sports.

      • Scorpio Jones, III

        Yep, Senator, I see your point…true dat.

        As to the fellow who can’t come up with a name….gosh, I am humbled.
        maybe you should stick to remaining anonymous.

    • Turd Ferguson

      That’s funny. I’d always thought that Democrats were the ones avoiding the tax man, what with their not working and all.

      Generalizations are fun.

    • The 99%

      Amen Brother!!!1!!!1!
      I’m glad to see you joining us in demanding that everybody pay high taxes and then transfer that money to us!
      Those lousy Republicans crap indoors too! That’s the main reason I have no use for them.

    • austintwo

      If he predeceases his wife, she receives his property without estate tax, regardless of its value. “Lowering the value of his estate” would not be an issue in any way.

  11. Go Dawgs!

    Good. Now, she can throw his ass out.

    • The Lone Stranger

      Well, in light of the fact that Jay Paterno apparently still lives with the ole folks, I would imagine that he can continue to do laundry and other essentials as they emerge.

      • Go Dawgs!

        Jay’s still there? What about the other son, the huge lawyer? I’d imagine that they had to throw him out to make the grocery budget manageable. Joe Pa was only pulling down about a million a year.

        • The Lone Stranger

          That fat bastard has a cooler that likely puts the Cheeseburglar’s to shame.

        • Keese

          True. Out of all the comments, why is a 600k house “significant estate planning” for a guy that makes his kinda money and at that age? Maybe he really was planning on retiring after this season…? Just a thought

  12. The Lone Stranger

    I kew things were kept “in-house” in those parts (PSUville) but the orgy of inter-relationships continues to amaze. Now Mrs. Paterno may have a familial connection to the law firm working the estate? Not that there is technically anything wrong with that, but weird. And how much money do you guess Cassidy, K@#%^$ & Pohland contributed to The Second Mile?

  13. HK

    Grabbing at straws a little bit here I think. Sure it could conceiveably be due to the scandal, but thats also a pretty standard move for people with that kind of money in a lot of circumstances. Plus I thought the general consensus was already that paterno pretty clearly met his legal obligation to society, just not his moral obligation.

  14. Normaltown Mike

    Nothing to see here.

    His mortgage broker probably advised him to “quick claim it” to her so they could do a refi on a different house and claim it as owner occupied.

  15. Alex

    This is silly. I work in the business and can easily see how this would be estate planning. Currently, a husband and wife each get a 5mm exemption so he moves a 600k house over to his wife to balance his estate at 5mm a piece for a total of 10mm. Also, the timing of the maneuver is appropiate because of the upholding of the current estate laws last year. He couldn’t have done this in up until now because the laws were all in question. Not sure why the individual quoted in the article wouldn’t recognize this. Looks like sensationalism to me . . .

  16. Toom

    Anyone catch the fact that his lawyer’s name was Wick?

  17. Scott

    In 1984, Paterno donated the 1 million to begin the funding drive for a new library. So clearly he must have know about Sandusky in 1984. Telling.

  18. Alex

    You couldn’t competently prepare a will without knowing the estate laws. Laws were only slightly clarified at the end of last year.

  19. Alex

    I am assuming the size of his estate, but it seems like a fair assumption. Remember how Steinbrenners estate had to pay $0 taxes last year? That was because the estate laws were in flux and nobody knew what the asset size exemptions were going to be. Midnight on Dec.31st they became 5mm per individual and 10mm per couple.

    • I understand that.

      Look, I’m not saying there’s zero chance that estate planning was involved here, just that it’s not as likely as the other possibility.

      For example, if the house is worth close to $600K and JoePa transfers it to his wife for $1, there are going to be gift tax consequences from that transaction. That’s a strange way to engage in estate planning which presumably is for the purpose of tax reduction.

      Plus, other than last year’s anomaly, the exemption amount has been steadily on the rise. If the Paternos are shifting assets around to keep things in balance, wouldn’t it make sense for them to have been proactive about this many years ago when the exemption was lower?

      Like I said, anything’s possible here. Maybe they came up with something years ago and forgot to file the paperwork, who knows? All I’m saying is that it’s a little extreme to suggest there aren’t other explanations that make sense, especially given the timing.

  20. Alex

    Sure people had wills, but high net worth individuals had no idea if the wills they had were competant until the estate laws were clarified.

    • Again, I understand. But as the laws change, you’d change the will, at least to the extent that a marital deduction trust provision didn’t cover a sufficient portion of the assets of the estate.

  21. Alex

    Senator, what is your email address so I can send you something that will clarify this . . .