Many parents focus on the idea that their children are “getting a new mother/father” and go into a new relationship guided by their emotions. However, children don’t adapt to the new partner overnight.
To make a patchwork family work, both partners need to put in a lot of effort on all levels. This not only goes for the relationship, but also for their pension and inheritance law.
The law favors traditional families
The law is aimed at traditional family circumstances, despite the fact that, according to the Federal Statistical Office, 5.5 percent of Swiss family households are patchwork families.
What should receive particular attention with respect to pensions? Payments from the first pillar (AHV/IV), as well as those from the second pillar (pension fund), depend on whether the partners are married and have children together.
Let’s take the following case as an example: Ms. Smith and both her children move in with Mr. Brown, who has a son. Both partners are divorced and now live together, unmarried. Mr. Brown is employed full-time and Ms. Smith on a 50% basis.
Disabled person's child's pension: only for biological children
If Mr. Brown becomes permanently disabled due to serious illness or injury, he will receive a disability benefit from the first and second pillars, as well as a child benefit – but only for his biological son. In total, these benefits will be lower than his previous earned income. This can put a strain on this family of five's budget. To be able to claim child benefit for Ms. Smith's children, Mr. Brown would have to be married to her.
Suppose that Mr. Brown dies of his illness: Ms. Smith will also lose out. The AHV does not consider a domestic partner the same as a widow or widower. The pay-out of the benefits is subject to the fund's regulations, which may allow you to register your partner.
Succession: adjust your will early on
Inheritance is difficult to sort out in the case of death. According to the law, the surviving spouse and the biological children – or adopted children – are the principle inheritors. They each get half of the estate. Unmarried, Ms. Smith and both her children would go empty-handed.
If you have a patchwork family and want to specify who receives your assets later, you should set out your wishes in a will or in a contract of inheritance. You can even specify who inherits the assets after the death of the provisional inheritor.
In the tragic case of the disability or death of a partner, your payments increase slightly if you are married. Conversely, cohabiting couples fare better with the AHV retirement pension. The spouse’s pension has a ceiling of 150 percent.
Either way, it is recommended to have your individual situation analyzed by a professional, to plan ahead with pillar 3a and to assess insurance solutions, to at least soften the financial blow that life’s unfortunate events may bring.