In short, the controversy surrounds his reaction and response to sexual abuse allegations of members of his staff. By allegedly not taking taking more action with what was reported to him was enough, in the eyes of the University, to part ways with him. The likely fall out from this will be increased attention to the matter, fueled by media and university and law enforcement reaction, and soon to likely follow will be the shotgun blast of law suits against Paterno, his staff, the university, etc.
Regardless of what actually happened, or where Paterno's actions lie on the spectrum of proper and improper, he is faced with years of either paying out judgments to the alleged victims, or negotiating settlements with the alleged victims, or defending his actions and trying to avoid paying the alleged victims. Not forgetting the tragic effect all of this has on the alleged victims and their families, but from a strict legal perspective for Paterno, this is the stuff nightmares are made of. This is why Asset Protection exists, and Paterno may already understand this ever-important principle.
However (and that is a big whopping, "however"), there is a legal transaction that is referred to as a "fraudulent transfer," which essentially holds that any transfer of an asset to make collection of that asset by a creditor or judgement holder legally entitled to that asset, more difficult, such transaction is fraudulent and can be "undone" to facilitate the payment to the creditor or judgment holder. So if Paterno were to have made this move this morning, after the allegations have been swarming around for a couple weeks, it would certainly be deemed as fraudulent, as he would have a hard time arguing that such a non-traditional transfer was done for other reasons. (And I say non-traditional, because we cannot forget the fact that he does not own the house anymore, and theoretically, upon a dissolution of his marriage, he would have zero chance of recovering any part of the house). However, the real asset protection issue here lies on the fact that the transaction was made 4 months ago.
My thoughts are shared with those of legal experts that no inherent tax benefit in this transaction is apparent. Paterno's estate planning attorney is making the claim that the transaction was unrelated to any allegations that Paterno may have heard about prior to it making its way to the mainstream media, but rather as part of a "long-term estate planning program," but even that is a bit on the non-traditional side of things. So if these allegations turn into lawsuits, and these lawsuits turn into judgments, and these judgements turn into claims against Paterno and his assets, he will be faced with having to make the argument, that despite the fact he has had his whole lifetime to plan his estate, and despite the fact these horrible allegations have recently come to light that could possibly result in significant exposure to him, that this transfer (and any others that we do not know about) have nothing to do with the allegations, and nothing to do with reducing his liability exposure, and solely to do with an unrelated long-term estate planning strategy...and argument that will not be easy to make look convincing.
So what is the takeaway from all this (ignoring, of course the underlying allegations), if you feel you need asset protection planning, it is likely too late. The only wise way to go about planning, is to be proactive, and to take care of it before you need it.