Swiss Inheritance Law Reform – Who Gets What?

Switzerland offers mountain views and a high quality of life that has drawn in many Brits over the years. If you have relocated to the land of cheese and chocolate or own any assets in Switzerland, it is important to be aware of the legislative changes to inheritance law and seek reputable legal advice.

Forced Heirship and Recent Changes

Forced heirship is a widely used concept in Europe and other parts of the world. It aims to prevent the children and often the surviving spouse in a marriage (or registered civil partnership) from being disinherited by a Will, by ensuring that they are guaranteed a minimum or compulsory share of the deceased’s estate.

When it comes to Swiss inheritance law you will most likely encounter two key terms* – Pflichtteil (compulsory share) and Erbteil (statutory share). The compulsory share is the minimum portion of the estate that must pass to certain family members when you have a Will. The statutory share, on the other hand, is only relevant when the deceased died without a Will (intestate) and determines the portion the surviving spouse and children will inherit according to the rules of intestacy.

To simplify, if there is a Will then the compulsory share must be taken into account, and if there is no Will then the statutory share is applied. Crucially, even where children are estranged from their parents, they are entitled to split their minimum share among themselves irrespective of what their parent’s Will recorded. There is a timeframe in which they must claim their compulsory portion in court.

The most recent change to Swiss inheritance law came into force on 1 January 2023. For the first time in over a century, Swiss Parliament decided to reform the law in an effort to reflect the changes to existing family structures.

Marriage and Civil Partnerships

Prior to this year, the surviving spouse or civil partner of a deceased person was entitled to a minimum of 1/4 of their assets and their children to 3/8 of their assets.

Following the introduction of the new inheritance law in January 2023, the compulsory share of the children has been reduced to 1/4 (2/8). If there is more than one child, they will share their 1/4 (2/8) between them.

In a situation where there is a surviving spouse and a child/children this means up to half of the estate can be divided freely without any restrictions and brings us a little closer to the testamentary freedom enjoyed in the UK.

NOTE: Civil partnerships can only be entered into by same-sex couples and will need to be registered in order for the above to be applicable. On 1 July 2022, Switzerland introduced “Marriage for All”, which means same-sex couples can now marry and can no longer enter into a civil partnership. A civil partnership can now be changed into a legally recognised marriage.

Divorce – Do I Still Inherit?

If a couple is getting divorced, they reserve their statutory right to inherit (and with that the compulsory share they are entitled to) until the final decree has been issued. However, you may be able to deny your spouse from receiving their compulsory share if you compose a letter of wishes explaining this.

Cohabiting Couples

The situation for couples that are living together (Konkubinat) is slightly different but still comes with increased leeway.

Where there is a Will, children are guaranteed half of the estate and the other half is freely disposable, which means it can be inherited by the surviving Konkubinatspartner. Nonetheless, if the other person dies without a Will, the entire estate is inherited by the children. 

Parents

The biggest change comes with the compulsory share of the parents being abolished in its entirety, regardless of whether the deceased has left a Will or not.

Scenario 1 –

Pre-2023

Anna and Rolf are married with two children. When the first of them dies, they wish to leave their assets to the surviving spouse and their children. The surviving spouse and children are the statutory heirs in this scenario.

Anna is survived by Rolf and her two children. She must leave 1/4 to Rolf and 3/8 to the children, leaving her with 3/8 to be distributed freely. She can increase the portion of the statutory heirs or leave it to others.

2023 onwards

Anna and Rolf are married with two children. Anna wishes to leave a significant portion of her estate to her younger sister.

In this case, Rolf is entitled to inherit 1/4 and the children 1/4, leaving 1/2 which can pass to Anna’s sister.

Because the compulsory share of the children has been reduced, Anna has greater freedom to leave half of her estate to her sister.

If Anna were to die intestate, then Anna’s sister would not be able to benefit from the estate. So, in this scenario it is important that Anna makes a Will.

Scenario 2 –

Tanya and Heinrich are married without children. Both of them want to leave all their assets to the other on their death. If Heinrich is survived by his wife and parents, then his parents would have previously been entitled to 1/8 of the estate, leaving Tanya with at least 3/8.

With the reform, Tanya would still be entitled to a minimum of 3/8, but Heinrich’s parents would not be entitled to automatically benefit from the estate at all.

Only where Heinrich fails to draft a Will, Tanya would receive 3/4 of the estate and his parents 1/4 respectively.

No Will - No Change

The reform does not affect the statutory shares of the estate if the deceased did not draft a valid Will. It is therefore highly recommended, particularly for couples not in a formal relationship to draft a Will if they want their partner to benefit from their estate.

Choice of Law

In Switzerland, nationality and residence play important factors in succession planning.

Foreigners living in Switzerland can make an election in their Will for the law of their nationality to apply.

This is set out in Article 90(2) of the Federal Statute of Private International Law –

A foreigner can choose the country of his nationality to apply to his estate unless they do not hold citizenship of the foreign country or have become Swiss citizens at the time of death.

UK nationals can therefore select ‘UK’ inheritance law to govern their estate, but only if they habitually reside in Switzerland.

*Please note that German legal terms have been used in the article.

Stone King LLP Services

Do you have a holiday home in Switzerland? Thinking of moving? Stone King LLP offers international and cross-border services from buying a property abroad to drafting Wills and providing inheritance tax advice.

For more information please contact solicitors in the international and cross-border team at Stone King LLP – Charlotte Macdonald, Dan Harris, Raquel Ugalde, Emma Seaton, Bryony Anning or Marina Emmanouel either by calling +44(0)1225 337599 or by emailing international@stoneking.co.uk.