Family Transmission of assets: make plans early on

In Switzerland, succession is regulated by law. If you want your own wishes taken into account, you should arrange this early on.

05 May 2020 7 min read
With a will or an inheritance contract, you can define who is to receive what proportion of your assets.

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?

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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