Revision of inheritance law: More self-determination regarding your estate
The new Swiss inheritance law entered into force on January 1, 2023. The reduction of statutory compulsory portions allows for a larger divisible portion. This gives testators more self-determination in the disposal of their estate. In this way, modern forms of cohabitation are better taken into account. Overview of the inheritance law revision.
Rules governing compulsory portions in the revised inheritance law
The main change to the revised Swiss inheritance law applicable since January 1, 2023, is the reduction in the compulsory portions. The compulsory portion forms part of the statutory share of inheritance. It ensures certain relatives a minimum participation in the estate. Under Swiss inheritance law, this protection is extended to the following legal heirs: descendants such as children, grandchildren, and great-grandchildren as well as spouses or registered partners. The compulsory portion must not be violated by estate planning.
The impact of the revised inheritance law is as follows:
- The compulsory portion of descendants has been reduced: Now the protected compulsory portion is only one-half rather than three-quarters of a child's statutory share.
- The compulsory portions for the spouse or the registered partner remain the same: The protected compulsory portion remains one-half of the statutory share of inheritance.
- The compulsory portion for parents has been abolished: Parents are still entitled to an inheritance, but their statutory share of inheritance is no longer a protected compulsory portion.
The reduction in the compulsory portions simultaneously increases the divisible portion. This means that testators can now freely dispose of at least half of their assets. This gives them more freedom in estate planning.
Greater divisible portion under Swiss inheritance law
Example: Compulsory portion of a testator who leaves behind a spouse and two children.
Abolition of the compulsory portion in the event of divorce
In the event of a divorce, the statutory share of inheritance applies to spouses until divorce proceedings have been completed. The difference under the revised inheritance law, however, concerns compulsory portions: Spouses no longer have a protected compulsory portion as soon as divorce proceedings have been initiated.
Thus, the testator can reduce or completely eliminate the share of inheritance of their (estranged) spouse. A will or inheritance contract must be drawn up for this purpose.
No regulation for cohabitation under the revised inheritance law
Couples who are neither married nor living in a registered partnership are still not entitled to any mutual inheritance. For example, cohabiting couples must continue to actively regulate the devolution of their estate by means of a will or inheritance contract in order to ensure that the other inherits.
Under the revised inheritance law, the divisible portion has increased. This gives testators more leeway to make bequests to their partner. In patchwork families, the revised law opens up additional opportunities for making bequests to stepchildren.
It should be noted that larger bequests to cohabiting partners and stepchildren can result in significant inheritance and gift taxes, depending on the canton.
Other amendments to inheritance law
- Usufruct:
With regard to usufruct pursuant to Art. 473 of the Swiss Civil Code, the divisible portion now amounts to 50% of the estate. In other words, spouses can mutually bequeath each other half of the estate in assets and grant half as a life interest vis-à-vis joint offspring. - Pillar 3a retirement savings:
Tied pension provision held by banks no longer forms part of the estate – as was already the case for insurance solutions. This means that pension capital in Pillar 3a will be paid out directly to beneficiaries without requiring the consent of the heirs. However, Pillar 3a assets are taken into account for the purpose of calculating the compulsory portions – but the amounts are not subject to equalization. - Gifts after the conclusion of the inheritance contract:
Under the new inheritance law, there is generally a ban on gifts after the conclusion of an inheritance contract. This means that gifts made at a later date can be contested. This is provided that the inheritance entitlement of beneficiaries is thereby reduced. However, the testator can reserve the right to continue to make gifts in the inheritance contract.
Exception: This does not apply to common occasional gifts.
In order to avoid contestability, the amount of potential gifts should be fixed in the inheritance contract through a proviso for the period after the contract has been drawn up.
Existing wills remain valid despite the revised inheritance law
Existing wills and inheritance contracts will generally remain valid under the new inheritance law. In individual cases, however, this could lead to awkward situations. In particular, if certain phrases in the estate planning suggest that the testator would have made different bequests as a result of the revised law. In light of the new provisions of inheritance law, it is worthwhile reviewing and revising your estate planning.
