By Life Quotes, Inc. Staff

A Wisconsin Supreme Court ruling on Tuesday will place the responsibility of paying federal and state taxes on personal estates, rather than those who inherit money from them, the Associated Press reports.

The ruling will affect recipients of “payable on death” accounts. These accounts are typically set up at banks or credit unions to transfer all financial assets of the holder to beneficiaries upon their death. The court rejected a proposal that would have divided estate taxes between all beneficiaries in the event that the deceased failed to specify a recipient, according to the AP.

Chief Justice Shirley Abrahamson, on behalf of a unanimous court, wrote that state and federal law is clear in making estates responsible for tax liabilities, reports the AP.

Estate taxes can be costly to the survivors of the deceased. In addition to payable on death accounts, individuals may lessen their loved ones’ financial burden by purchasing a life insurance policy, whose proceeds may be used to pay estate taxes or set up a trust for heirs.

This article was originally published by Life Quotes, Inc.