7 things you need to know about Swiss inheritance law
Thinking about writing a will or just want to know more about inheritance law in Switzerland? Here are seven important areas to be aware of.
Writing a will is one of the most important decisions most of us will make in our lives, therefore it is essential to do it properly. Here are seven things you need to know about Swiss inheritance law.
1. Distinction between applicable law and competent authorities
The law which you choose to apply to your will does not necessarily determine which country’s authorities will be competent for the handling of your inheritance.
While you can choose the law which applies to your will – to a certain extent (see point 3 below), it will be the international private law rules of the country in which you have your last domicile or “ordinary residence” (if the European convention on inheritance applies to your will) that will determine which country will have jurisdiction over your inheritance.
READ MORE: How to avoid rental scams in Switzerland
The law which applies to your inheritance determines for example what the inheritance consists of, who is entitled to inherit, for which share and who is liable for the debts of the inheritance.
The methods of executing the will are governed by the laws of the country whose authorities are competent.
2. Taxation of inheritance
Due to the differences in inheritance tax worldwide and even within Europe, not having a will and dying in a country which has high inheritance taxes, could cause important financial consequences to your legal heirs.
It is important to note that in Switzerland there is no inheritance tax on distributions to one’s children or spouse. However, there is an inheritance tax of 18-23 percent for distribution to siblings and 22-27 percent for great-aunts or uncles, nephews, nieces, grand-nephews or grand-nieces.
Reader question: How do I challenge my rent in Switzerland?
Not planning your inheritance can have important financial consequences.
In the EU some people can effectively pay inheritance tax twice or more in different countries. Most EU Member States levy taxes upon the death of a person. Some Member States apply a tax on the heirs, while other Member States apply a tax on the basis of the estate.
In both cases tax liability is determined on the basis of a variety of relevant factors (i.e. the residence, domicile or nationality of the deceased and/or of the beneficiary; and/or the location of property). This situation may potentially lead to double or even multiple taxation of the same inheritance in different Member States.
3. Can I make a will in Switzerland and choose Swiss law?
If you are a foreign national and you reside in Switzerland and plan to live here long term, the Swiss international rules on private law, allow you to choose Swiss law as the law which applies to your will, since it will be deemed the law of your last place of domicile.
Therefore, even if you unfortunately die in a plane crash on the way back from your holidays in the Caribbean, regardless of where in the world the plane crashed, Swiss law would, in principle, still apply to your will.
You can make a will either handwritten and signed and leave it with the notary who will send it to the Registrar of wills or type it and sign it in front of two witnesses before the notary. It is recommended to consult a lawyer or a notary to ensure that nothing is missing or contradictory in your will.
4. Can Swiss authorities be competent for the distribution of my assets?
Swiss nationals can choose the competence of Swiss authorities and /or Swiss law either for all their assets or for their assets based in Switzerland.
However, the authorities of the country where the real estate of a Swiss national is situated, remain competent for the handling of the real estate.
5. Compulsory reserves in Swiss inheritance law
There are compulsory parts of your inheritance, allocated by Swiss inheritance law, for your spouse and children, which you cannot override in your will.
These are called the “reserves”.
These are:
- Three eighths of the estate for children
- One-eighth of the estate for each parent (only if you have no children)
- Three eighths of the estate for the surviving spouse or partner.
Therefore, for a person who leaves behind his spouse and children, he/she can dispose of one-fourth of his/her estate to anyone he/she pleases but must keep three-fourth of the estate for the spouse and child / children.
EXPLAINED: How does the Swiss pension system work – and how much will I receive?
As of 1st January 2023, the Swiss law on inheritance will change the reserves as follows:
- One fourth of the estate for the children
- Half of the estate for the spouse
The parents will no longer be entitled to any compulsory part.
However, in the absence of children, half of the estate can be disposed of according to the will of the testator.
There are only some of the changes – the others will be a part of another article in The Local.
6. Other particularities of Swiss inheritance law
Swiss law deems that there is a financial conflict of interest between the surviving spouse and the minor children of the deceased since both are legal heirs. The Protection court of the concerned canton therefore appoints a guardian for the management of the financial interests of the minor children, unless this Guardian has already been identified in the will.
The Guardian cannot be a legal heir of the deceased and should preferably be in Switzerland or have knowledge of Swiss rules and regulations.
It is important to appoint an executor of your will, who cannot be a legal heir.
Swiss law allows you to either leave the “right of usufruct” or the “right of living” in favor of your legal heirs or third parties on real estate or other assets. The right of usufruct has a financial value to be declared in your tax returns whereas the right of living does not.
There are also other legal mechanisms which allow you to ensure that the part of the estate inherited by the spouse is then passed on to the biological children of the deceased and not split with the new spouse and other children from the second marriage.
READ MORE: The ten strange laws in Switzerland you need to know
7. What to keep in mind
Life is unpredictable – make a will.
Inheritance is law is complex and implies international treaties, international private laws etc. Don’t believe you understand everything by just relying on the internet.
Drafting a will without consulting a person who understands the laws which could apply to your estate is as good as not making a will – since an incomprehensible will could be more dangerous than no will for your legal heirs.
Understand the tax implications of your choices – where you live, where your assets are located, where your children live, etc.
This article was prepared by Renuka Cavadini of Page & Partners.
Page & Partners provides an introductory call of 20 minutes in English. We look forward to being able to assist you.
Tél.+4122 839 81 50
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Writing a will is one of the most important decisions most of us will make in our lives, therefore it is essential to do it properly. Here are seven things you need to know about Swiss inheritance law.
1. Distinction between applicable law and competent authorities
The law which you choose to apply to your will does not necessarily determine which country’s authorities will be competent for the handling of your inheritance.
While you can choose the law which applies to your will – to a certain extent (see point 3 below), it will be the international private law rules of the country in which you have your last domicile or “ordinary residence” (if the European convention on inheritance applies to your will) that will determine which country will have jurisdiction over your inheritance.
READ MORE: How to avoid rental scams in Switzerland
The law which applies to your inheritance determines for example what the inheritance consists of, who is entitled to inherit, for which share and who is liable for the debts of the inheritance.
The methods of executing the will are governed by the laws of the country whose authorities are competent.
2. Taxation of inheritance
Due to the differences in inheritance tax worldwide and even within Europe, not having a will and dying in a country which has high inheritance taxes, could cause important financial consequences to your legal heirs.
It is important to note that in Switzerland there is no inheritance tax on distributions to one’s children or spouse. However, there is an inheritance tax of 18-23 percent for distribution to siblings and 22-27 percent for great-aunts or uncles, nephews, nieces, grand-nephews or grand-nieces.
Reader question: How do I challenge my rent in Switzerland?
Not planning your inheritance can have important financial consequences.
In the EU some people can effectively pay inheritance tax twice or more in different countries. Most EU Member States levy taxes upon the death of a person. Some Member States apply a tax on the heirs, while other Member States apply a tax on the basis of the estate.
In both cases tax liability is determined on the basis of a variety of relevant factors (i.e. the residence, domicile or nationality of the deceased and/or of the beneficiary; and/or the location of property). This situation may potentially lead to double or even multiple taxation of the same inheritance in different Member States.
3. Can I make a will in Switzerland and choose Swiss law?
If you are a foreign national and you reside in Switzerland and plan to live here long term, the Swiss international rules on private law, allow you to choose Swiss law as the law which applies to your will, since it will be deemed the law of your last place of domicile.
Therefore, even if you unfortunately die in a plane crash on the way back from your holidays in the Caribbean, regardless of where in the world the plane crashed, Swiss law would, in principle, still apply to your will.
You can make a will either handwritten and signed and leave it with the notary who will send it to the Registrar of wills or type it and sign it in front of two witnesses before the notary. It is recommended to consult a lawyer or a notary to ensure that nothing is missing or contradictory in your will.
4. Can Swiss authorities be competent for the distribution of my assets?
Swiss nationals can choose the competence of Swiss authorities and /or Swiss law either for all their assets or for their assets based in Switzerland.
However, the authorities of the country where the real estate of a Swiss national is situated, remain competent for the handling of the real estate.
5. Compulsory reserves in Swiss inheritance law
There are compulsory parts of your inheritance, allocated by Swiss inheritance law, for your spouse and children, which you cannot override in your will.
These are called the “reserves”.
These are:
- Three eighths of the estate for children
- One-eighth of the estate for each parent (only if you have no children)
- Three eighths of the estate for the surviving spouse or partner.
Therefore, for a person who leaves behind his spouse and children, he/she can dispose of one-fourth of his/her estate to anyone he/she pleases but must keep three-fourth of the estate for the spouse and child / children.
EXPLAINED: How does the Swiss pension system work – and how much will I receive?
As of 1st January 2023, the Swiss law on inheritance will change the reserves as follows:
- One fourth of the estate for the children
- Half of the estate for the spouse
The parents will no longer be entitled to any compulsory part.
However, in the absence of children, half of the estate can be disposed of according to the will of the testator.
There are only some of the changes – the others will be a part of another article in The Local.
6. Other particularities of Swiss inheritance law
Swiss law deems that there is a financial conflict of interest between the surviving spouse and the minor children of the deceased since both are legal heirs. The Protection court of the concerned canton therefore appoints a guardian for the management of the financial interests of the minor children, unless this Guardian has already been identified in the will.
The Guardian cannot be a legal heir of the deceased and should preferably be in Switzerland or have knowledge of Swiss rules and regulations.
It is important to appoint an executor of your will, who cannot be a legal heir.
Swiss law allows you to either leave the “right of usufruct” or the “right of living” in favor of your legal heirs or third parties on real estate or other assets. The right of usufruct has a financial value to be declared in your tax returns whereas the right of living does not.
There are also other legal mechanisms which allow you to ensure that the part of the estate inherited by the spouse is then passed on to the biological children of the deceased and not split with the new spouse and other children from the second marriage.
READ MORE: The ten strange laws in Switzerland you need to know
7. What to keep in mind
Life is unpredictable – make a will.
Inheritance is law is complex and implies international treaties, international private laws etc. Don’t believe you understand everything by just relying on the internet.
Drafting a will without consulting a person who understands the laws which could apply to your estate is as good as not making a will – since an incomprehensible will could be more dangerous than no will for your legal heirs.
Understand the tax implications of your choices – where you live, where your assets are located, where your children live, etc.
This article was prepared by Renuka Cavadini of Page & Partners.
Page & Partners provides an introductory call of 20 minutes in English. We look forward to being able to assist you.
Tél.+4122 839 81 50
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