Inheritance law revision: new quotas and compulsory shares
Published on 10.06.2022 CEST
More flexibility for testators when planning their estates
With the revision of its inheritance law, Switzerland now has a new, modern legal framework governing inheritance that came into force on January 1, 2023. The revised law significantly increases your freedom as a testator to pass on your assets as you’d like. So when planning your estate, you can decide more flexibly what and how much you want to leave your loved ones. We have summarized the most important changes for you here.
Reduction of the compulsory amounts due to heirs
Before January 1, 2023, Swiss inheritance law had a mandatory stipulation that the surviving spouse and children have a claim to three quarters of the total inheritance share. The new inheritance law reduces this compulsory amount to half of the amount of the inheritance share.
Elimination of the compulsory share awarded to parents
Parents were previously considered to be heirs who are entitled to a compulsory share of the total estate, if the decedent was childless. With the new inheritance law, this is completely eliminated.
Increase in the free quota for usufruct
Spouses who have children together can benefit from the so-called usufruct solution. Half of the estate can now be transferred to the surviving spouse instead of one quarter. The surviving spouse can now also be granted usufruct for the remainder (previously three quarters, now half). With this higher ownership quota, the spouse’s benefit is being extended.
What is meant by compulsory share?
Inheritance law determines who is an heir and how large their shares of the estate are: the so-called inheritance share. Each category of heir and their inheritance share may vary depending on the specific constellation. If you do not make any specific inheritance arrangements, the legal provisions will apply.
In a will, you can determine who should receive how much of your estate, which may differ from the inheritance share. However, with so-called compulsory shares, the law restricts your freedom to have your estate distributed as you wish. The law stipulates that certain heirs have a mandatory right to a certain portion of the inheritance share of the estate. These compulsory shares portions must always be taken into account when distributing the estate’s assets; however, you are free to dispose of the rest of your estate as you wish. This is the so-called “free quota.”
No more compulsory share for the spouse in divorce proceedings
Before January1, 2023, if the spouses were in the process of divorce and one of the spouses died during the divorce proceedings, the surviving spouse was still entitled to his or her compulsory heirship portion. This right only expired when the divorce became final.
The revised inheritance law changes this. Under certain conditions, a spouse’s entitlement to a compulsory share will no longer apply if divorce proceedings have been initiated. However, the “still-married spouse” would first have to be excluded from inheritance by means of a will or inheritance contact.
Donations to be prohibited after conclusion of an inheritance contract
The previously applicable law provided that after the conclusion of an inheritance contract, the parties could in principle freely dispose of their assets during their lifetime. In other words, the principle of freedom of donation applied. This meant that donations made to third parties after the conclusion of an inheritance contract were generally permissible, exept if they were based on an obvious intent to damage.
With the revision, a paradigm shift is taking place from the principle of freedom of donation to the principle of prohibition on donation. This means that after the conclusion of an inheritance contract, all donations (with the exception of occasional gifts) are in principle contestable, unless the inheritance contract explicitly allows such donations.
Transitional provisions
The time of the testator’s death is the decisive date for the applicability of the new inheritance law. If the testator died before January 1, 2023, the old inheritance law applied; after that, the new inheritance law applies. This is regardless of whether a document regulating the estate (a will or inheritance contract) was drawn up before or after January 1, 2023.
FAQ about the inheritance law revision
1. I have not yet drawn up a will and/or inheritance contract to regulate the disposition of my estate:
The inheritance law revision is a good reason to reconsider your situation and regulate your estate so that it meets your wishes.
2. I have already drawn up a will and/or inheritance contract:
Check whether the document you have produced to regulate your estate is compatible with the changes in the revised inheritance law: Does your will make it clear whether the compulsory shares apply under the old law or the new law? Does your inheritance contract regulate the freedom to donate your assets, or will the prohibition on donations now apply?
With the new inheritance law revision, you may have more flexibility. Take advantage of this opportunity to check whether your existing inheritance arrangement still reflects your wishes.
The spouses Martina and Serge have two children together. By means of a will, Serge stipulated that his children will receive their compulsory shares, while assigning his wife the freely disposable quota in accordance with the maximum benefit allowable. Serge has an accident and dies. His estate amounts to CHF 1,000,000.
According to previous inheritance law (before the revision):
The children inherit CHF 375,000 (compulsory share: 3/8)
Martina inherits CHF 625,000
Under the current inheritance law (after the revision):
The children inherit CHF 250,000 (compulsory share: 1/4)
Martina inherits CHF 750,000
Overview: Lower compulsory shares for children
For married couples:
| current | ¼ spouse | ¼ child | ½ free quota | ||||||
| previous | ¼ spouse | ⅜ child | ⅜ free quota | ||||||
For non-married couples
| current | ½ child | ½ free quota | |||||||
| previous | ¾ child | ¼ free quota | |||||||
© Vontobel 2022
Frida lives with her partner Alain. They have no children. Frida’s parents are both still alive. She wants her partner Alain to benefit to the greatest degree possible. In her will, she stipulates that the parents will receive their compulsory share and that Alain will receive the rest. Suddenly Frida dies of a heart attack. Her estate amounts to CHF 1,000,000.
Accoridng to previous inheritance law (before the revision):
Her parents inherit CHF 500,000 (compulsory share: 1/2)
Her partner Alain inherits CHF 500,000
Under current inheritance law (after the revision):
Her parents inherit CHF 0 (parents’ compulsory share is abolished)
Her partner Alain inherits CHF 1,000,000
Overview: abolishment of compulsory shares to parents
For non-married couples
| current | 1/1 free quota | ||||||||
| previous | ½ parents | ½ free quota | |||||||
For married couples
| current | ⅜ spouse | ⅝ free quota | |||||||
| previous | ⅜ spouse | ⅛ parents | ½ free quota | ||||||
© Vontobel 2022
The Sampleson family agrees in an inheritance contract that the surviving spouse will be the sole heir, and after his or her death the remaining estate will go to their three children. However, after the death of the father, Peter Sampleson, the mother Elsa makes a donation of CHF 300,000 to the foundation “Paws for All.”
According to previous inheritance law (before the revision)
Freedom of donation is the guiding principle. The donation is therefore permissible (subject to a finding that the mother's intention was to cause damage), and the children cannot successfully contest the donation.
Under current inheritance law (after the revision)
Prohibition on donations is the guiding principle. The donation is therefore not permissible, and the children can contest the donation against “Paws for All,” unless the inheritance contract explicitly allows such donations.
Our summary
The revision of Switzerland’s inheritance law opens up the possibility of structuring one’s own estate more flexibly, more in line with one’s own wishes and ideas. In particular, spouses, cohabiting partners, stepchildren in “patchwork” families, and other close relatives can now benefit from a larger share of the estate.
Our experienced team of inheritance specialists will be happy to help you with your individual inheritance arrangements, or with a review of your existing solution.
