Reform Of Swiss Inheritance Law: Necessity To Review Existing Testamentory Dispositions
A revision of the Swiss law of succession recently came into force on 1st January 2023 (“The New Law”).
This New Law has a particular impact on an individual’s freedom of disposal and gives the individual (or “de cujus”) more scope to plan his or her succession.
In light of these changes, any existing will or inheritance contract should be checked and may need to be updated.
As a firm specialising in this area, we are able to assist any client with a Swiss connection, both in terms of wealth and estate planning.
The main changes introduced by the New Law are as follows:
Under the New Law, the parents of the de cujus lose their status as heirs with a statutory entitlement. Only the surviving spouse (husband/wife or registered partner) and the descendants of the de cujus retain this status.
The statutory entitlement of the surviving spouse is maintained at 1/2 of his or her succession right, whereas that of the descendants is reduced from 3/4 to 1/2.
This change has the effect of significantly increasing the available portion of the estate that is not subject to the statutory entitlements mentioned above. Thus, a married de cujus with child(ren) sees his available share increase from 3/8 to 1/2. An unmarried de cujus with child(ren) will see his available share increase from 1/4 to 1/2 and a married de cujus without children from 1/2 to 5/8.
There is therefore a clear increase in the share of an estate that can be freely distributed by a will or inheritance contract.
Usufruct in favour of the surviving spouse
The New Law also affects usufruct legacies. Indeed, the de cujus may leave a usufruct in favour of his or her surviving spouse covering the entire estate.
He may also make a usufruct bequest to his surviving spouse of a capitalised value of 1/2 of the estate and allocate the other 1/2 in full ownership to the surviving spouse (or to any other person).
Furthermore, it is now possible to make a usufruct bequest to the surviving registered partner.
Action in abatement
The New Law establishes an order according to which reductions must be made. Acquisitions in accordance with the law on intestate succession must therefore be reduced first, followed by bequests and finally by inter vivos gifts.
The New Law also specifies that the allocation of an additional share of the benefits of the marital union will be considered to be an inter vivos gift, subject to reduction.
Finally, the beneficiaries of an inheritance contract can now challenge dispositions of property on death including inter vivos gifts that conflict with the commitments made by the de cujus under the inheritance contract.
In the case of divorce proceedings based on a joint request or continued by joint request in accordance with the rules on divorce, or if the spouses have lived apart for at least two years, the surviving spouse loses his or her status as an heir with a statutory entitlement and can therefore be excluded from the de cujus’ estate by will or inheritance contract as soon as the divorce request is filed. From that moment on, the surviving spouse also loses his or her status as an heir under any will or inheritance contract made during the marriage, as well as the allocation of a possible additional share of the benefit of the marital union.
These rules also apply to the procedure for dissolution of a registered partnership.
If you have any questions, please do not hesitate to contact us