HuffPost Quotes Beth Kaufman on Kristi Noem's Estate Tax Bill
The federal estate tax is so burdensome that Rep. Kristi Noem’s family spent 10 years in debt just to pay the bill after her father died in a farming accident, the South Dakota Republican has repeatedly claimed throughout her political career. [. . .] But documents from Noem’s father’s estate show the congresswoman has omitted important details. After her father died in 1994, Noem’s mother received a life insurance payout big enough to pay the estate tax bill several times over, according to documents that HuffPost obtained from Hamlin County’s clerk of courts.
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Estate attorney Beth Shapiro Kaufman, president of the tax law firm Caplin & Drysdale, said there are three main reasons someone might buy life insurance. One is simply to provide for a family that loses its main breadwinner, another is to use as an investment and the third is to generate cash for paying the estate tax.
Kaufman said that because the insurance wound up as part of Arnold’s estate ― instead of in a tax-advantaged trust ― Arnold may have simply bought the insurance for the more traditional reason of providing for his family.
“When people buy life insurance for estate liquidity purposes they almost always put their insurance in a life insurance trust,” Kaufman said.
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Excerpt taken from the article "The Real Story Behind Kristi Noem’s ‘Death Tax’ Ordeal" by Arthur Delaney for HuffPost's.