Pension Estate planning for single persons

A community of heirs can be extensive. Single persons in particular need to specify precisely who inherits their estate.

by UBS Insights 15 Jul 2019

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Who is the legal heir?

Single persons should first find out who their legal heirs are. Under Swiss inheritance law, the order of inheritance is based on the principles of parentele: close relatives take priority over more distant family. A community of heirs can comprise of several persons both in Switzerland and abroad, which can complicate the settlement of estates. Therefore you are advised to name just a few persons as heirs in your will and to make bequests to others as need be.

Beware of inheritance tax

Heirs and parents are entitled to a compulsory share of the estate. If there are no heirs to whom compulsory share entitlement applies, the testator is free to dispose of the entire estate as they wish. In most cantons, only immediate heirs are exempt from inheritance tax. Significant inheritance taxes generally apply to non-relatives or if the estate includes property abroad.

Beneficiaries predecease the testator

When you make your will, remember that the beneficiaries could die before you, the testator. The relevant share of the estate could then go to the legal heirs who weren’t supposed to receive anything. Therefore it is advisable to specify alternative beneficiaries in your will for such cases as this.

Pension assets

Pension assets are distributed according to the relevant legal provisions and do not need to be separately assigned.

Donations to a good cause

You can also name charitable organizations as heirs or legatees. If the estate involved is very large, it may even be advisable to set up your own foundation.

Summary

For single persons, it is almost always advisable to make testamentary arrangements. Generally speaking, you should make sure that the community of heirs consists of only a few persons, ideally those living in Switzerland. When handling your estate planning, you should seek help from an expert. And if the estate is very large, you are advised to consult an expert executor.

What you need to know

Formalities

A will can be made in writing (signed and dated) or officially notarized. Let your heirs know where the will is kept and who will be the executor, if appropriate.

Blood is thicker than water

Swiss inheritance law is based on the principles of parentele: close relatives take priority over more distant family and spouses also have inheritance rights.

Compulsory shares

Spouses, registered partners, heirs and parents (if there are no children) are entitled to compulsory shares.

Joint heirs

Heirs are automatically classed as the joint heirs and become joint owners of the estate. They have joint ownership of all assets, and all debts are transferred to them under joint liability.

Legatees

A legacy (also known as a bequest) is a way of bequeathing a certain part of an estate. Legatees must notify the heirs or the executor whether they wish to accept the object or amount bequeathed.