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21 May 2021

Revision of Swiss inheritance law: Federal Council sets the date of entry into force

The Federal Council has announced that the revision of Swiss inheritance law will enter into force on 1 January 2023.

This revision aims at adapting inheritance law to the evolution of society.

The amendments include reducing the statutory entitlement (“réserve légale”) of the descendants, abolishing the statutory entitlement of the parents, and thus increasing the testator’s freedom to dispose of his assets, and changes to the calculation of the estate.

Statutory entitlement

Firstly, the statutory entitlement of the descendants is reduced (from three quarters to half their right of succession) and the parents’ statutory entitlement is abolished. The testator will thus be able to favour people of his choice more and will benefit from greater flexibility in the transfer of family businesses. In this respect, it should be noted that the Federal Council intends to further simplify the transfer of a business by succession by taking additional legislative measures to remove certain existing obstacles. The Federal Council has put a further draft out to consultation in April 2019 and will probably present the message to Parliament later this year.

Secondly, in the event of death before the end of the divorce proceedings or proceedings for the dissolution of the registered partnership, the survivor will, in principle, lose his status as heir entitled to a compulsory share.

Improved status of the surviving spouse or registered partner

The right to dispose (“quotité disponible”) where there is a usufruct in favour of the surviving spouse or registered partner is increased from one quarter of the estate to half of the estate. The testator will thus be able to favour his surviving spouse or registered partner more by granting him half of the estate in full ownership and the usufruct on the other half.

Clarifications regarding the calculation of the estate

In the case of the attribution of an additional share of the profit to the surviving spouse or registered partner by marriage contract or assets agreement, this attribution must be qualified as an inter vivos gift (and not as a testamentary disposition) and will have to be included in the calculation mass of the statutory entitlement (which will thus increase).

Private pension plans (pillar 3a) do not form part of the estate but may be reduced if the heirs entitled to a compulsory share do not receive their statutory entitlement.

What remains unchanged

The statutory entitlement of the surviving spouse and registered partner are maintained at half of their succession right and will thus be equal to that of the descendants.

The statutory heirs remain the same and their inheritance shares will not change.

As a consequence, in the absence of testamentary dispositions, the division of the deceased's estate will be identical as today’s.

Other current changes in Swiss inheritance law

In addition to the above-mentioned revision of the legal provisions facilitating the transfer of a business by inheritance, the Federal Council has undertaken to revise the chapter of the Private International Law Act on succession with the aim of minimising the risk of conflicts of jurisdiction and conflicting decisions in relations with the majority of EU states and providing citizens with greater legal certainty and predictability in the fate of their assets after their death.

Charles Russell Speechlys can advise you on your wealth and estate planning and assist you in drafting your testamentary dispositions.

If you have any questions, please do not hesitate to contact Grégoire Uldry or Christophe Levet.

 

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