Family Transmission of assets: make plans early on

Life is full of significant events, be it the birth of a child or grandchild, the purchase of a property, starting your first job or retiring. Unfortunately, the loss of a loved one is also one such event. We are reluctant to think about our own mortality and the need for estate planning, but here too there are important decisions to be made: What will you leave behind when you die? Who should inherit your estate? Which non-family members or organizations do you want to leave something to? Do your own ideas match those of your heirs and beneficiaries? Timely estate planning will help ensure that your assets are inherited in line with your wishes. We will show you what you need to bear in mind.

Intestate succession is part of Swiss inheritance law and applies if a person dies without leaving a will. Different legal heirs inherit depending on whether you leave behind a spouse, children or more distant relatives. The following are the five most common scenarios: 

Plan your estate by entering into a marital agreement

Why does a marital agreement affect your inheritance? When you are married, Swiss matrimonial property law takes precedence over inheritance law. If one spouse dies, the first step is the division of assets according to the matrimonial property regime. This is used to determine which part of the marital property the surviving spouse is entitled to and which shares are assigned to the deceased’s estate.

In the absence of a marital agreement, the regime of “community of acquired property” applies. With a marital agreement, assets can be divided up under the terms of “joint marital property” (all of the property belongs, with a few exceptions, to both spouses), or “separation of property” (both spouses remain owners of their own assets).

Each matrimonial property regime has its own peculiarities, which have a decisive effect on the outcome of the matrimonial property regime. Which arrangement is best for you and your family can only be discovered by taking into account your personal concerns, your family situation and your financial circumstances.

Consider your family model

Do you already have a clear idea of how and to whom you want to pass on your assets? If you do not want to be bound by the rules of intestate succession, you must take action. The following applies particularly if you are cohabiting, living as a patchwork family or in an alternative family model: partners who are neither married nor living in a registered partnership are not mutually regarded as legal heirs and are not entitled to a share of the inheritance unless they have been so favored in a will.

Note: Even if cohabiting partners are favored in a will, the compulsory share still applies to joint or non-joint descendants or to parents. Future heirs entitled to a compulsory share can only be deprived of this share if they explicitly waive their right to it by signing an agreement to this effect.

Will or inheritance contract – what is the difference?

If you do not wish to be bound by the rules of intestate succession, you can make a will or sign an inheritance contract, taking into account the compulsory shares that apply under law. But how high are these compulsory shares and what is the difference between a will and an inheritance contract?

Distributing assets via donation

Another way to ensure that your assets are passed on according to your wishes is a lifetime gift or an advance inheritance. Assets that are transferred to children, spouses or third parties as a gift are not taken into account in the event of inheritance, unless compulsory shares of protected heirs are affected. In the case of an advance inheritance, a gift is made while a person is still alive, but this must be deducted from the previously agreed share of the inheritance.

Such gifts are then of course no longer in the possession of the donor. Most cantons levy a gift tax, whereby the amount of taxation usually depends on how closely related the donor and the recipient are.

It’s worth talking about succession

Married couples, co-habiting couples and families should discuss the topic of estate planning together and with the involvement of their children and grandchildren. A number of different factors need to be taken into account. For example, it is important which matrimonial property regime was agreed in a marriage, whether other beneficiaries are to be taken into account in addition to the legal descendants or whether the surviving partner wants to marry again. It is worth consulting an expert and making arrangements at an early stage – so that your estate can also be passed on as you would wish.

The revised law will apply from 1 January 2023 and provide for greater flexibility in estate planning. For more information, read our article “Revised inheritance law: greater freedom from 2023”.