Among all of the legal brouhaha the Penn State scandal has raised, there was one going around estate planning circles this month. In July, Joe Paterno transferred the home to his wife for $1. Journalists speculated whether this was to shield assets, therefore an indication that perhaps the coach knew that a scandal might be on the horizon.
Many Pennsylvania attorneys who practice in civil litigation quickly ended this theory, pointing out that Pennsylvania law already exempts the home from judgments. There was really no need to protect the home from creditors. So what's going on?
A simple transfer to a spouse doesn't have great estate planning consequences, unless one is having health issues and such a transfer could prevent control issues from arising or if the transfer is made to a spouse as trustee of a trust. Both appear to the the case. The New York Times had a great discussion of how a transfer to a spouse as trustee of a trust can have great tax benefits. In the end, there really isn't much to have a brouhaha about.