Switzerland’s 2023 inheritance law revision: Getting ready for new quotas and compulsory shares
Wealth & Pension Planning
10/06/2022
Tiempo de lectura:
3
minuto(s)
More flexibility for testators when planning their estates
With the revision of its inheritance law, Switzerland will have a new, modern legal framework governing inheritance when it comes 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 will be able to 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
Until now, Swiss inheritance law stipulated 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 are currently considered to be heirs who are entitled to a compulsory share of the total estate, if the decedent is childless. With the new inheritance law, this is completely eliminated.
Increase in the free quota for usufruct
Under the current law, 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
If the spouses are in the process of divorce and one of the spouses dies during the divorce proceedings, under current law the surviving spouse is still entitled to his or her compulsory share. As the law currently stands, this right only expires when the divorce becomes 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 currently applicable law provides that after the conclusion of an inheritance contract, the parties can in principle freely dispose of their assets during their lifetime. In other words, the principle of freedom of donation applies. This means that today, donations that are made to third parties after the conclusion of an inheritance contract are generally permissible. They are not permissible—and therefore contestable—only if they are 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 dies before January 1, 2023, the existing inheritance law applies; if the testator dies after January 1, 2023, 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
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.
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