On January 1, 2023, the revised Swiss inheritance law will come into force. It will allow you to freely dispose of a larger portion of your own estate. We explain what exactly will change and with what effect.
The current inheritance law was enacted more than a century ago and has since only been amended in a few specific areas. At the time, marriage was virtually the only form of family life, the average life expectancy of people was much lower, and there was no national social security system yet. Therefore, in its report “Modernization of Family Law”, the Federal Council proposed the adaption of the inheritance law to better reflect contemporary social reality. It should take into account that an increasing number of people no longer live in traditional family relationships and wish to benefit other people close to them. So, in order to accommodate the diversity of lifestyles, the revised law stipulates that testators can freely dispose of a larger portion of their estate thanks to reduced protected shares. They can thus benefit, for example, their de facto life partners or stepchildren to a greater extent.
Today, children are entitled to three quarters of the statutory share of the estate as a forced heirship right; in the future, they will only be entitled to half. The protected share for parents will no longer apply and that for spouses will remain unchanged. Now, let us say a testator leaves behind a daughter and a son and lives in cohabitation. Under current law, each of the two children receives 37.5% of the estate. The testator is left with only a small available quota of 25% to benefit his partner. In future, the testator will be able to freely dispose of 50% of their estate, because each child will only receive a protected share of 25% This results in numerous new possibilities of distribution. For example, the testator can allocate 75% of their estate to their daughter, who will take over the family business, and allocate the protected share to their son. However, they could also give both children the protected share and leave the other half of their estate to their partner. Alternatively, they can give 25% to all surviving dependents and bequeath the rest to a charitable institution.
So, now is the time to review your will or inheritance contract and consider new options. After all, an existing contract does not become invalid under the new law. It is simply interpreted according to the new law if the undersigned person passes after the revision comes into force. Depending on the wording, this may therefore pose difficult questions in individual cases. Especially if it is not clear whether the testator would have disposed of their estate differently, had they known about the new inheritance law. Also, depending on the constellation, the new law and the changed forced heirship rights may lead to undesirable outcomes.
In any case, we recommend that you review your existing will or inheritance contract with regard to the changed legislation and, if necessary, adapt it accordingly. We will of course be happy to support you and provide you with competent advice from the initial consultation through to execution.
21. April 2022
