Pension Revision of inheritance law – the changes at a glance

To adapt the Swiss inheritance law to new society requirements, the Federal Council is seeking to amend it.

by Oliver Pscheid 26 Aug 2019

Photo: UBS

Raising the discretionary limits of the testator

At the heart of the planned change to inheritance law is the reduction of the compulsory shares of heirs or their annulment for parents. Specifically, heirs will receive 1⁄2 rather than 3⁄4 of the estate, provided the testator has no spouse or registered partner. If the heir is survived by a spouse or registered partner, the compulsory share of the estate will be 1⁄4 rather than 3⁄8 of the estate. The testator therefore enjoys greater discretion. The compulsory shares of spouses or registered partners remain unchanged. However, the right to a compulsory portion can no longer be asserted during a divorce or dissolution procedure.

Testators having greater discretion means that they can choose, for example, to leave more to a de facto partner (stable partnership) or his or her children. According to the Federal Council, however, de facto partners and their children will still not enjoy the same status as the legal beneficiaries or those whose claim to a compulsory portion is protected by law. A further aim of the planned amendments to inheritance law is to make company succession easier. The “free quota” is increased due to the reduction of compulsory shares. The discretion of the testator to transfer a company or parts of it is increased accordingly.

Financial assistance for de facto partners

The changes to Swiss inheritance law mean a de facto partner will be able to claim financial assistance after the death of the testator, if he or she would otherwise suffer hardship. This legislation is intended to prevent the de facto partner from having to depend on welfare payments. The entitlement to assistance will be in the form of a pension and ensures that the person concerned enjoys a basic standard of living. The designated amount of financial assistance cannot exceed 25 percent of the estate.

Pillar 3 funds

In addition, the new law stipulates that pillar 3a funds (bank and insurance solutions) are not part of the estate, but that they may be claimed against if compulsory shares are not paid. The law has therefore been changed to reflect common practice.considered when calculating how to divide up the pension pot.

Schedule

On August 29, 2018, the Federal Council adopted a dispatch on the revision of inheritance law. This still needs to be debated in parliament. Depending on the result of the discussions, a referendum could be required. A date as to when the revised inheritance law will come into force is difficult to predict.

The main points in a nutshell

The Federal Council wishes to modernize inheritance law and adapt it to new forms of cohabitation.

Compulsory shares will be reduced for offspring and abolished for parents, so that testators have more discretion over their estate. It will then be easier to make provision for those without a compulsory share or inheritance entitlement, as well as company succession within or outside the family.

A hardship provision will protect the de facto partner of a deceased person against poverty.