Life is a long series of events. Be it the birth of a child or grandchild, the purchase of real estate, or starting and leaving working life. Unfortunately, the loss of a loved one is also a part of life. We are reluctant to think about our own mortality, but there are important decisions to be made here as well: what will be left of you once you are no longer here? Who should your estate be passed on to? Which persons or organizations do you think should benefit? Do your ideas correspond to those of your descendants and beneficiaries? Take your succession planning in hand in good time to ensure that your assets will be passed on according to your wishes. We will show you what you need to bear in mind when planning the transmission of your assets.
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Swiss inheritance law sets out a legal order of succession
In general, Swiss inheritance law sets out a legal order of succession in the event of death. The following principles and compulsory legal shares apply:
- The spouse (or partner in the case of registered couples) receives half of the estate if the inheritance is shared with direct descendants (own children or grandchildren);
- The spouse receives three quarters if it is shared with parents or their descendants (siblings, nieces or nephews of the deceased);
- If neither direct descendants, parents or their descendants are still alive, the spouse inherits everything;
- If no relatives are still alive or can be traced, the inheritance goes to the state.
Succession planning begins during your lifetime: matrimonial property law and inheritance law
For married couples, matrimonial property law comes into play even before inheritance law. If one of the spouses dies, what is known as the matrimonial property settlement initially applies. This determines which share of the marital property is allocated to the surviving spouse and which share belongs to the estate of the deceased.
In the absence of a marriage contract, the community of acquisitions applies. A marriage contract can establish the division of property through a community of property, can specify that all the property belongs to both spouses, or set out the separation of property, whereby both spouses remain owners of their own property.
Each matrimonial property regime has its own characteristics, and these can have a decisive impact on the outcome of a matrimonial property settlement. Which arrangement is best for you can only be determined by taking into account your financial circumstances, family situation and personal concerns.
Different family models are a fact of life
Do you have a clear idea of how you want to pass on your assets? If you want to deviate from the legal order of succession, you should actively take steps to arrange this. Especially if you live with a common-law spouse, as a patchwork family or have an alternative family model: couples who are not married or registered are not regarded as each other’s legal heirs and are not entitled to a share of the inheritance, unless preferential treatment has been defined.
Attention: even if cohabiting partners are named in a will, the compulsory legal share still applies to existing spouses, descendants or parents. These relatives therefore always receive a minimum amount in accordance with inheritance law. The compulsory legal share can only be withdrawn if the future heirs sign an inheritance waiver in which they explicitly forgo the possible inheritance.
Will or inheritance contract – what is the difference?
If you want to opt for anything other than legal order of succession, you can record this in a will or inheritance contract. But what is the difference?
Any wishes that are contrary to legal provisions are recorded in a will. As long as the compulsory legal shares for those entitled to inherit are respected, the testator is free to decide which shares of their assets are to be passed on to which beneficiary. Close friends or foundations can be favored to a certain extent, for example. And even if the compulsory legal shares are not respected, this does not simply make a will invalid. The heirs have one year to contest such a will and claim their full compulsory legal share.
A will must be handwritten, dated with the day, month and year, and personally signed with your first and last name. A will can be changed or revoked at any time. It can be kept at home or be entrusted to a notary. Official repositories are also available. Keeping the will at home carries the risk that it will not be found or, in the worst-case scenario, even be destroyed by the finder. If two or more contradictory wills have been written by the same person, the most recent version automatically applies. If you are no longer in a position to write your own will by hand, it is possible to have a will drawn up by a notary in the presence of two witnesses.
Unlike a will, which is written unilaterally by the testator and can be revoked at any time, an inheritance contract is an agreement drawn up between the testator and one or more beneficiaries. Individual agreements can be made in this way, irrespective of the rights to compulsory legal shares. If you live with your husband and his children from another marriage, would you like to leave something to your stepchildren as well, for example? If so, you can record this in an inheritance contract. The prerequisite for an inheritance contract is that everyone must consent to the agreement.
An inheritance contract is binding and can only be canceled if all the contractual parties agree to the cancellation. The inheritance contract must be signed by all the parties before a notary in the presence of two independent witnesses.
Distributing assets via donation
Another way to ensure while you are still alive that your assets will be distributed as you wish is to make a donation. Assets that are given to children, spouses or third parties in this way are not taken into account in your succession. These assets are then of course no longer in the possession of the giver. Donations also influence the tax situation of the recipient in a different way from an inheritance. A donation is nevertheless still taxed, although the tax burden depends on the relationship between the recipient and the donor, and on the canton in which the recipient is resident.
It’s worth talking about succession
It’s essential for married couples, couples and families to discuss the topic of succession planning together and with the involvement of the next generations. This is because various factors must be taken into account. For example, it’s important to know which matrimonial property regime was agreed upon for a marriage, whether other beneficiaries come into question in addition to the legal descendants, or what happens if the surviving partner marries again after the succession. That’s why it’s worth consulting an expert and taking care of succession planning at an early stage – so that your assets can be passed on according to your wishes.
“How can I do good and achieve a lasting impact?”
If you’d like to use some or all of your wealth to help a good cause, the UBS Philanthropy Foundation is an efficient and flexible solution. With a personalized Sub-Foundation as part of your succession planning, your legacy is in good hands – for matters close to your heart. UBS experts will be happy to help you make the right decisions for you personally so that your donations are in the best hands to achieve the greatest possible impact.
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