Wisconsin Supreme Court rules on estate taxes
The Wisconsin Supreme Court has ruled that personal estates are responsible for paying state and federal estate taxes rather than individuals who inherit money.
The decision applies to accounts that have a “payable on death” recipient. A payable on death bank account is a regular bank account that names a specific person as the beneficiary of all funds once the bank account holder dies, explains Steve Thompson on AssociatedContent.com.
The accounts are becoming increasingly common in estate planning, according to a Bloomberg Businessweek article.
The court was unanimous in its decision. In the ruling, Chief Chief Justice Shirley Abrahamson said state and federal law is clear in making estates — not the recipients — responsible for tax liabilities that can be up to 50 percent on the accounts.
Attorneys for Jessica Schleis filed the case that led to the ruling. Schleis was 17 when she inherited more than $3.7 million in two accounts from her deceased godfather, James Sheppard, a co-founder of the Menomonee Falls, Wis.-based Cousins Subs sandwich chain.
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